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PwC Tax & Legal, with a team of professionals composed of Filippo Zucchinelli, Alvise Becker and Carlo Nicoli Aldini for the legal aspects and Alessandra Cavina for tax matters, assisted Gran Sasso Energie in the transfer of 100% of Gran Sasso S.r.l.’s share capital to Hera Comm.
Gran Sasso S.r.l. is an Italian company operating in the gas and electricity retail sector with around 15,000 final customers for gas and over 3,400 for electricity, mostly located in the areas of L’Aquila, Pescara and Chieti.
In 2015, the company had revenues for 9.7 million Euro by selling 16.5 million cubic meters of gas and 8.5 GWh of electricity.
The acquisition of Gran Sasso S.r.l. by Hera followed those of Fucino Gas, Alento Gas (Francavilla), Julia Servizi (Giulianova) and has allowed Hera to consolidate its presence in the region of Abruzzo, and to provide services to over 60,000 customers, in addition to the already-existing 155,000 clients in the region of Marche.
PwC Tax and Legal Services is one of the most reputable firms in Italy operating in the field of legal and tax services, with offices in 12 cities over the Italian territory (the main offices being in Milan and Rome) and approximately 700 professionals.
PwC Tax and Legal Services is part of the PricewaterouseCoopers global network.
Affidea, the leading specialist in diagnostics investigations, clinical laboratories and cancer treatment services in Europe, has announced the signing of an agreement to acquire Hiperdia Diagnostics Centres, a leading provider of high performance medical imaging services in Romania.
Hiperdia was founded in 1997 and offers high performance medical imaging, laboratory and clinical consultations in 23 medical centres operating in 12 counties in Romania. Affidea, headquartered in Hungary and registered in the Netherlands, also acquired Sanmed medical centres in 2015.
Dimitris Moulavasilis, Affidea Group CEO, said: "Having Hiperdia join the Affidea network is proof of our commitment to extend long-term medical services of excellence for the benefit of patients in Romania. We have great respect for the quality of care and operational excellence within Hiperdia. These are the values that bring us together, and I am confident that with this addition, Hiperdia will strengthen our leading position in the European high performance medical imaging services landscape.”
Dr. Octavian Lebovic, CEO of Hiperdia said: "Since its inception, the 20 years ago, Hiperdia’s main objective was to provide high-performance quality medical imaging services to provide doctors and our patients accurate and complete diagnosis. Selecting a new partner for Hiperdia was a decision I analysed carefully, and I believe Affidea is the best choice. This transaction is a guarantee that everything we have done so far in Romania is appreciated and validated at the highest level, by one of the largest healthcare providers in Europe."
In this transaction, which still requires approval from regulators, the Affidea Gorup was advised by Rizoiu & Poenaru, Clifford Chance and Skadden, Arps, Slate, Meagher & Flom (UK) LLP, and Deloitte. Bondoc & Associates and Weil, Gotshal & Manges assisted Hiperdia in the deal.
Interview with Lucian Poenaru of Rizoiu & Poenaru:
Rizoiu & Poenaru advised Affidea on issues related to Romanian law. We acted as the commercial counsel for the purchaser dealing with corporate, M&A, medical, operational and general business law matters of the transaction. We were also involved in drafting and negotiating the SPA and relevant documentation as it regards the contract law aspects of the deal.
This transaction is mostly beneficial to the recipient of the medical services covered by the parties to the deal. Thus we reckon that the deal should be read as a landmark to such medical services for diagnostics investigations, clinical laboratories and cancer treatment services. Due to its composite nature and importance in scope, the transaction was also good for the counsels involved, as it regrouped law matters of different complexity and nature, and referred to various laws applicable to the deal.
Because the transaction is still subject to further approval by the Competition Council, we cannot provide details on the deal at this point.
Nyrstar NV (Nyrstar or the ‘Company’) recently announced that it has entered into a Share Purchase Agreement (the ‘Agreement’) to sell its El Toqui mine in Chile to Laguna Gold Limited (Laguna), an Australian based mining company, for a total cash consideration of US$25 million (the ‘Consideration’), plus future proceeds through a price participation agreement with Laguna (the ‘Transaction’).
Macquarie Bank Limited has granted facilities totalling US$12,500,000 to Laguna to assist with the purchase.
The Consideration payable to Nyrstar consists of US$12 million payable in cash by the closing of the Transaction and US$13 million in milestone cash payments over a four year period following the closing of the Transaction. In addition, Nyrstar will have the opportunity to retain upside exposure to an improving commodity price environment by receiving additional cash proceeds through a price participation agreement with Laguna on the first 7.9 million tonnes of ore processed at El Toqui following the closing of the Transaction. The price participation commences above a zinc price of $2,100 per tonne and is applicable at set zinc prices. As an example, assuming a flat zinc price of $2,300 per tonne post-closing of the Transaction, Nyrstar would receive additional proceeds of approximately US$19.5 million from the price participation on an undiscounted basis.
As part of the Transaction, Nyrstar and Laguna have also agreed to enter into an off-take agreement pursuant to which Laguna will sell to Nyrstar 100% of the zinc concentrate production from El Toqui for the initial four year period following the closure of the Transaction and 85% of the zinc concentrate production thereafter. Closing of the Transaction is subject to customary closing conditions and is expected to occur within two months.
GrilloHiggins Lawyers from Melbourne, Australia, acted for Laguna, and its team was led by partner Garrick Higgins and Senior Associate Eli Davis-Ross.
Bofill Mir & Alvarez Jana Lawyers assisted Laguna in Chile. BMO Capital Markets Limited and Lazard & Co. acted as financial advisors to Nyrstar in connection with the Transaction.
CVC Capital Partners recently announced that funds advised by CVC Capital Partners (CVC) have signed a binding agreement to acquire ÅR Packaging Group AB (AR Packaging). Under the terms of the transaction, CVC will acquire 100% of the company from its current owners, Ahlstrom Capital and Accent Equity.
Founded in 2011 through the merger of A&R Carton and Flextrus, AR Packaging is one of Europe’s leading packaging companies with sales of approximately €560 million (pro forma 2015) and 2,200 employees across 17 factories in 9 countries. The company has performed strongly in recent years, posting a 27% increase in net sales last year.
Headquartered in Lund, Sweden, the group is divided into three divisions: Branded Products, Barrier Packaging and Food Packaging. Its products and solutions are predominantly used for folding carton and flexible packaging, as well as machinery systems, packaging design and development. AR Packaging has long-standing customer relationships with many of the world’s leading consumer brands in the food and tobacco segments.
The completion of the transaction is subject to customary regulatory clearances.
Herbst Kinsky advised CVC Capital Partners in this transaction regarding all aspects of Austrian law including the financing of the acquisition. The team of Herbst Kinsky was led by Christoph Wildmoser (Private Equity/Finance) supported by Philipp Baubin (Finance), Alexander Weber (Corporate/Private Equity), Carl Walderdorff (Finance), Matthäus Metzler (Regulatory), Bianca Möller (Commercial), Tanja Lang (Employment) and Johannes Frank (Real Estate). The Swedish firm Cederquist was Lead Counsel.
CVC Capital Partners was also advised by Citigroup Global Markets, KPMG and Bain&Company.
FNB Namibia has successfully concluded negotiations to acquire 100% of Pointbreak and EBank, subject to all necessary regulatory approvals.
Pointbreak, a Namibian financial services group, provides investment management and wealth management services to the private, corporate and institutional markets, managing in excess of N$8 billion of third party capital.
EBank delivers innovative inclusive banking to its clients, many of whom are in rural areas with little access to banking services.
The acquisition of Pointbreak will enhance the investment know-how and local wealth management capability of FNB, while Pointbreak's long standing client focused approach aligns well to FNB's vision of leading the premium banking space in Namibia.
The transaction will further complement the intended launch, of Ashburton Investments in Namibia, the asset management business within the FirstRand group, FNB Namibia's controlling shareholder. Clients of Pointbreak will therefore receive access to the wider range of investment products and financial services offered by FirstRand.
The transaction is still subject to various regulatory approvals, including those from the Bank of Namibia, Namfisa, Namibian Competition Commission and the South African Reserve Bank and can only be implemented after these approvals have been received.
Ellis Shilengudwa Inc. (ESI) acted as local counsel for FNB Namibia Holdings Limited and First National Bank Namibia Limited (collectively ‘FNB’) in a share purchase transaction in terms of which FNB will acquire all of the shares held by Pointbreak Namibia (Proprietary) Limited and Pointbreak Group Holdings (Proprietary) Limited in Pointbreak Equity (Proprietary) Limited, Pointbreak Wealth Management (Proprietary) Limited, Pointbreak Trusts and Estates (Proprietary) Limited and Pointbreak Investment Management (Proprietary) Limited, from Pointbreak Namibia (Proprietary) Limited and Pointbreak Group Holdings (Proprietary) (Transaction).
In acting as aforesaid, ESI settled all the agreements recording and governing the implementation of the Transaction from a Namibian Law perspective and advised FNB on all regulatory issues relating to the Transaction. ESI also assisted and advised FNB on the preparation and submission of the applicable competition filings with the Namibian Competition Commission and matters incidental thereto.
The team from ESI that acted as aforesaid were Jurie Badenhorst, Ivo dos Santos and Peter Johns.
Core Capital Partners LLP (Core Capital) has invested in Turbine Efficiency Group, to support the business in it's next phase of growth.
Turbine Efficiency is a specialist engineering company based in Lincoln, England. The Group is a leading provider of maintenance, repair and overhaul services for industrial gas turbines. It's longstanding customer base ranges from large global multinationals to smaller industrial conglomerates, in the power, oil and gas, and industrial sectors.
Core Capital is an experienced provider of capital for growth, investing up to £25m in UK SMEs, and partnering with ambitious management teams looking to scale their operations and accelerate growth. The investment enables Turbine Efficiency to meet the high demand for its services from new and existing customers, and leverage its state of the art facility in Lincoln.
Robert Johnson, Executive Chairman, commented: “The investment from Core Capital marks a new phase for Turbine Efficiency. There is excellent market growth potential, and this investment will enable the team to attain such opportunities, both within the UK and globally. We are committed to serving our loyal clients to the highest standards as their reliable partners in power.”
Stephen Edwards, Managing Partner, Core Capital: “There is significant global demand for independent maintenance, repair and overhaul services, and we believe the team at Turbine Efficiency is uniquely positioned to capture this opportunity. We have experience working with SMEs to take them to the next level of growth and will be looking to invest further capital into TEL in order to fund acquisitions and further organic growth."
Interview with Sorca Hunt, Director of BTG Financial Consulting LLP and Mark Fry, Partner of BTG Financial Consulting LLP:
We were appointed as advisors to Core to undertake focused financial and commercial due diligence, to assist in their decision whether to invest in this business.
Our primary focus was to ascertain the business’s ability to generate future and sustained revenue based on its existing client base, alongside assessing the level of overheads that were considered appropriate and necessary. A further key focus of our work was to assess the short-term cash requirement of the business whilst sensitising the timing of receipts, to ensure the business had sufficient funding to comfortably meet its liabilities, prior to any investment made by Core.
During our work, we undertook a detailed review of the Group’s forecast model, challenging the assumptions as appropriate, both with regards to revenue and overheads. We provided assistance and guidance to the Finance Director as required, given that the due diligence process required a lot of involvement from him whilst also continuing with his day to day job.
The Company needed external investment in order to meet existing liabilities and also to provide the Company with a funding platform to allow expansion both with existing and new customer relationships.
Core's investment has stabilised the business financially and has provided a stable platform for future growth. Moreover, Core’s commercial experience, skill set and global contacts will compliment and assist with the business’s growth plans.
As is the nature of the industry in which we operate, our due diligence work had to be completed within a relatively short timescale due to the business's need for investment. We ensured our team was suitably resourced with the required skill, so that any issues could be identified as soon as possible.
Our work involved spending considerable time on site and working closely with the management team, who were very co-operative. The highly skilled work force is clearly a key asset in this business.
Whilst the company had produced a cost saving plan, it was key to ensure that sufficient resources, and an appropriate structure was maintained in order to support the growth plans.
When you act on advice from a professional and things go wrong, you can seek redress, but time is against you. Often the problem is the point at which you discover your investment is now worthless or has attracted the attention of the tax authorities. But stories of pensioners losing their nest eggs or tax avoidance schemes attracting HMRC’s interest or worse, continue to undermine confidence in the financial sector.
Sarah Perry, Head of Dispute Resolution at law firm Wright Hassall, who helps clients claim against professional advisers, explains to LM: “When you pay someone for investment advice, either by fee or commission and their advice proves to be poor, bad or fraudulent, you can seek to recover your losses. However, the clock is ticking and time is limited for you to bring a claim, which could be a problem for pension advice, when it might be years before problems are spotted.”
Recognising a claim
Advice from any professional adviser can be wrong or at least inappropriate, but in recent years there has been a sharp rise in claims against financial advisers and professionals, mostly concerning:
HMRC is taking an increasingly aggressive approach to tax recovery, which is especially evident in relation to tax avoidance schemes, with challenges raised on a regular basis.
To the surprise of many, HMRC is now questioning what professionals previously considered to be ‘vanilla schemes’ in terms of tax planning. Financial investment mis-selling claims usually arise where an individual has invested into a fund on receipt of professional advice.
Having been advised for years to ride out the rough times, there often comes a point when an investor is unable to contact their adviser, and when they seek to drawdown on their investment, they can’t and panic ensues. Those losses arise infrequently, but will often have devastating effects, typically being linked to an individual’s pension and retirement planning.
When dealing with financial investments where an individual has lost money, which is easily traceable, a potential negligence claim can be identified very quickly.
When claims relate to tax avoidance schemes, things are more difficult, because it can take years for a claim to materialise from HMRC following an open enquiry into a previous Tax Return. It is not unusual for HMRC to investigate someone’s tax affairs many years after the original investment took place, and if HMRC consider fraud to be involved, then they can go back many years.
Evidence and immediate actions
In both types of claims, it’s essential to collate all communications, paperwork, emails, etc., to establish what the individual was told by their adviser and the risk they were prepared to accept.
If a person has been sold an unregulated collective investment scheme, then there are specific requirements a financial adviser must follow to ensure they can even promote that particular investment. If that process has not been followed, then establishing a breach of duty should be straight forward. However, simply establishing a breach of duty does not automatically result in a damages award.
Having appointed a solicitor with experience of litigating against professional advisers, an investor will still have to work closely with them to establish the causation position i.e., had appropriate advice been given, what would the individual have done.
The Courts are aware of parties looking at matters retrospectively with perfect hindsight, so all clients have to establish what their mind-set and plans were at the time, ideally by reference to documents from the period of the advice.
It is essential in all financial negligence claims to establish what ‘Know Your Client’ work was undertaken by the professional adviser. To be able to offer appropriate advice, there are some key things the adviser needs to understand:
If an individual has not had a conversation addressing these points with their financial adviser, it’s unlikely the adviser can prove justification for the investment decisions they made.
When participating in a tax scheme, the investor must have been given the opportunity to make an informed decision about potential consequences, with all risks explained in detail - documentary evidence should be sent to the client.
There should also have been some assessment of the individual’s risk profile to know whether it was appropriate to promote the scheme. If that information is not forthcoming from the professional adviser, this would serve as the foundation for a claim in negligence.
Solicitors can request information from the professional adviser involved, but all documents held by the individual investor should be sorted into a chronological order and given to the solicitor.
As soon as a significant amount of money has been identified as lost or HMRC have served an Accelerated Payment Notice, Follower Notice or Demand for Payment, then the individual concerned should speak to an experienced solicitor to establish whether there is the possibility of a claim for professional negligence. If a claim exists, it must be commenced prior to the limitation date as determined by the Limitation Act 1980. When time starts to run for each claim will vary, as will the length of time in which to bring a claim.
Generally, the starting point is six years from the breach of contract. One of the fall-back provisions, which usually applies in tax avoidance cases due to the delay in HMRC bringing their claim, is three years from the date in which someone is reasonably put on notice as to the potential for a claim against the professional. There are other dates from which time can run, but anyone who suspects they might have a claim, should seek expert legal advice before the six-year contractual period has passed to ensure the claim does not ‘expire’.
If limitation is fast approaching, then there are two options available for the solicitor. Firstly, they can work with the negligent professional to enter into a Standstill Agreement, so the matter can be investigated before proceedings are issued. This effectively freezes time for the period of the Agreement, which is contractually agreed between the parties and can easily vary from a month to several years. Secondly, without a Standstill Agreement, protective proceedings can be issued, with a Claim Form at Court stopping time for the purpose of the Limitation Act 1980. This then allows 4 months to formalise the claim and serve the necessary documents on the adviser.
Steps to compensation
Once a Solicitor has been instructed, they will decide whether it is best to pursue the claim through the Financial Ombudsman Service (FOS), Financial Services Compensation Scheme (FSCS) or the Courts.
If professional negligence proceedings are commenced, as part of the Professional Negligence Pre-Action Protocol a Letter before Claim will be drafted by the Solicitor. Once received, the adviser has three months and three weeks to formally state their position.
The professional adviser will usually refer the dispute to their insurer, who will instruct solicitors to respond on their behalf. If matters cannot be resolved during the pre-action protocol period and no form of alternative dispute resolution can be achieved, then the Solicitor will advise on whether issuing proceedings is the appropriate next step.
Once proceedings are issued, the Court process takes over and the parties must adhere to the timeframes imposed. Once directions have been set, depending on the size of the dispute, a trial is likely to start in 9 to 24 months’ time.
The FOS may be appropriate if the claim is for less than £150,000. If the professional has gone out of business then a claim to the FSCS may be appropriate (depending on the position with ongoing insurance), however, this is likely to be subject to a cap of £50,000.
In conclusion
Thanks to the disposable income available to those who have sought advice from professional advisers in recent decades, the sums involved ensure dissatisfaction will lead to complaints, which in turn will lead to action.
For anyone with money invested following advice from professionals, there are warning signs to watch for and actions to mitigate losses, but most people never receive compensation because they never make a claim or wait too long before talking to a solicitor.
We have had the wonderful opportunity of speaking to Russell Tillison, the Head of Legal at FirstPort. With a vast amount of experience, Russell gives valuable insight into what is sometimes perceived to be the ‘less glamorous’ residential property law sector. Russell’s passion for real estate and property law is evident, as he speaks on the UK’s Chancellor’s autumn statement, the challenges he faces in his role, the joys of working for UK’s largest residential property management company and how he manages his entire legal team.
How did you end up specialising as a real estate solicitor? What was the main motivation behind you specialising in property?
I come from a property family. My father is a chartered surveyor, my brother is a commercial agent and my wife is a property solicitor too; you could say that it is in my blood. The aspect of property that grabbed me most is the very and tangible nature of it. I love the fact I can see, touch, feel and personally associate with the subject.
Working for a property management company means that we get to work and interact directly with our customers, meaning we are closer to residents than other parts of the industry. We constantly put ourselves in the customers’ shoes to make sure we are delivering the best service and the relentless focus on customer experience is something I really enjoy.
What does a typical day as Head of Legal at FirstPort encounter? Was there anything that surprised you when you started working there?
It’s a real cliché but there is no typical day for me at FirstPort, which is why I love it so much. My relatively sizeable team (10 lawyers plus support staff) and we pride ourselves on keeping as much work as possible in-house, which means I work on a range of areas in the business. This ethos means that one moment we can be advising on a thorny data protection issue and the next it’s a tricky lease interpretation matter. I feel very privileged to lead a team which wraps around every aspect of the business – from management to insurance, lettings, sales and more.
One of the best surprises when I joined FirstPort was the appetite in the business, from the CEO down, to embrace the legal team as a genuine partner. Through my place on the Executive Board I have direct exposure to all areas of the business, and the collaborative and inclusive ethos which governs it. This in turn means my team and I can provide considered and pragmatic counsel to the differing business areas, and this ensures there is a common approach running through the company.
What cases are you commonly faced with in residential property management? What can you advise to clients, to avoid unnecessary legal issues?
By far, the biggest challenge faced by the industry is a general naivety to the nuances of leasehold. Residential property has historically been perceived as the less glamorous ugly sister of commercial property, but in actual fact it has a considerably greater amount of technical black letter law around it. The industry has many facets to it but they all come with the same big pitfall; if you fail to do proper due diligence, it is likely it will end up costing you dearly.
This is true whether you’re talking about carrying out a proper review of service charge provisions in a residential lease (for which you need only look at the recent Supreme Court decision in Arnold v Britton, where property owners on the Gower Peninsular were left with leases that by the end of their term would require an annual charge of £1,000,000 to be paid by each owner); or at the other extreme, the granular detail that needs investigating as part of an acquisition of the huge ground rent portfolios that are traded by funds for hundreds of millions of pounds. This makes my job more challenging, but as we are a highly specialised team of property experts, we are confident that we understand the risks and the best ways to navigate them!
How did your prior experience at Barclays Bank prepare you for your Head of Legal role?
Being seconded by Dentons to Barclays Bank was a fantastic experience. At the time, I played a role in the Chief Operating Officers legal team as the sole UK based commercial real estate counsel. Whilst I was supporting both the domestic portfolio of branches and offices, I also had conduct of the international real estate deals for the various BPO centres and back office functions. One of the most important parts of the role was establishing a feel for the corporate risk appetite and then seeking to align all jurisdictions as closely as possible with the business objectives. This equipped me both with the skills needed to work for a multi-disciplinary business such as FirstPort, but also a broader understanding of business objectives and planning which serves me well on FirstPort’s Executive Board.
Chancellor Phillip Hammond sets out to publish a Housing White Paper to address housing problems; from your perspective, what do you think is the most important thing to address?
I do not envy the Chancellor one bit. There are so many areas that he could focus on, from the well-trodden discussions around leasehold reform, to championing the case for the use of commonhold as a genuine alternative tenure. To my mind however, his main focus needs to be how to address the crippling housing supply issue and get the UK’s house builders to hit and even exceed their annual targets.
There also needs to be a broader conversation about different housing options. FirstPort has extensive experience in retirement property through our FirstPort Retirement arm as well as Retirement Homesearch, the UK’s number one retirement property specialist. This year we released a report into retirement property with the think-tank, the International Longevity Centre (ILC-UK), which highlighted that there will be 10 million people in the UK aged 65 or over in ten years, yet only 160,000 retirement properties are predicted to be built in that time. Just building homes for people starting on the ladder will not be enough – more could be done at all ends of the market.
Continuing from The Chancellor’s autumn statement, the UK government’s recent stamp duty reform (SDLT) has led to a sharp fall in property sales; how has this affected your work and clients and what do you hope the Chancellor’s alternative approach will result in?
I sometimes wonder whether the SDLT changes are a convenient scapegoat here. It’s undeniable that we have a seen a drop off in the volume of property transactions; however, lack of supply coupled with the uncertainty facing the UK economy in the wake of the Brexit vote has created the perfect storm.
I’d love to see the market flooded with new properties and efforts from the Chancellor to get construction of new homes moving again at a decent pace. It’s also promising to see we’re beginning to see more honest conversations about alternative options to ownership. At FirstPort we understand that the rise of build-to-rent and the private rented sector (PRS) means there are different options out there. We see our customers enjoying some of the benefits alternatives offer, such as apartment blocks or developments with high-quality amenities or in-house maintenance teams, so it’s encouraging to see the government move away from a sole focus on home ownership as the only answer.
How differently do you have to face cases involving national clients, in comparison to regional? What different challenges do they pose?
We are lucky at FirstPort to manage properties for some of the UK’s largest property investment funds and house builders. But we equally enjoy working with ‘Resident Management Companies’ at a more local level. We tend to find the funds are looking for lots of market intelligence and the use of ‘big data’ whereas the more local Resident Management Companies require a more hands on, relationship based approach.
Is there anything else you would like to add?
I would like to give special mention to one of FirstPort’s most recent initiatives which we are particularly proud of. Six months ago, we became the first company to officially partner with Barclays to offer their Digital Eagles mentoring programme. We seconded a number of our staff to train them up as ‘FirstPort Digital Eagles’ to help spread digital awareness and skills both to their colleagues, but also the residents on our developments. As you can imagine, partnering with an iconic business such as Barclays and using their product and a spinoff of their branding involved complex legal negotiation, but the outcome has been a free service to our residents and staff that we’re immensely proud of.
Going to court is not the ideal outcome for any trader or consumer and so resolving disputes beforehand is evidently highly desired. This is where an ombudsman can help to settle disputes between consumers and traders before matters get too heated. This month, we have the pleasure of speaking to a unique CEO and Chief Ombudsman: Kevin Grix, who represents the Ombudsman on the All Party Parliamentary Group for furniture at the Houses of Parliament. Kevin comes from a family of traders and has been running Dispute Resolution Ombudsman Ltd for over eight years.
In 2012, he was made a Freeman of the City of London and Liveryman at the Furniture Makers’ Company, a charity that helps to educate young people, raises industry standards and helps to provide for the disadvantaged. In 2015, he was appointed to the Executive of the Ombudsman Association, a body that advises government and helps to oversee the Ombudsman and complaint handling landscape in the United Kingdom. On top of this, he also holds a position on the Advisory Board to the Independent Football Ombudsman.
We speak to Kevin about his role as CEO of the Dispute Resolution Ombudsman, the disputes an Ombudsman often deals with and insights into developments in consumer law.
What does a typical day look like for you as the CEO of Dispute Resolution Ombudsman? What daily challenges do you encounter and how do you overcome them?
Although every day is different, I focus on retaining control of my day. Knowing when to let go and focussing on controlling the controllable is important. Many lawyers are only comfortable when dealing with facts and evidence. However, one of the traits that I have had to develop as a CEO is the ability to make commercial decisions based on imperfect information. As my experience has developed so too has my intuition and understanding the consequences of action or inaction.
Generally, I like to start my days very early at the gym, which also doubles as my news brief. Some executives work from lists but I am fortunate to have a good memory and I often keep my agenda for the day in my mind – it’s something that works for me and helps me to be agile. First task every day is to make myself aware of any issues that I need to be concerned with and to get briefings from my senior team.
Then I begin to address my emails and any post that is waiting for my attention before working through the telephone calls that I have booked in for that day. If I am travelling by car I tend to make use of that time on the phone – usually engaging with my fellow directors.
I am likely to spend some time with our Senior Ombudsman to review cases and any legal issues that we are dealing with. I will review and address any matters that have been raised by consumers or members. I sit on the Advisory Board of the Independent Football Ombudsman (created by the football authorities, the FA Premier League and English Football League) and the Executive Committee of the Ombudsman Association – so depending on my commitments to those organisations, I may allocate some of my time to those.
I will also spend some dedicated time to work with our Head of Communications and PR on various campaigns.
As CEO, how do you ensure you are directing the company in the correct direction? How do you advise your team to make the correct decisions for the company alongside clients?
I spend as much time listening as I do speaking. When I am directing staff, I tend to keep sessions succinct and try not to give more than two instructions at a time. I try to devote some of my time to observing the company and staff – this is important.
Eight years ago, the team was much smaller and therefore the scope of my role was very broad; it didn’t leave me much time to step back and look up. The problem when you don’t look up is you can take the wrong path without realising it. Observing what is going on helps me to ensure that my own team, particularly my senior team, continues to head in the right direction. Inevitably my teams will encounter problems that need solving – I am there to help them to do that, but usually they are equipped with the answer themselves and my role is to give them the courage and conviction to act upon it.
When dealing with my teams, knowing what to say and when to say it is important – often less is more. Keeping everyone engaged is critical but understanding what messages are suitable and relevant to the audience is a matter of judgement, as is the timing. I have always had the desire to learn, and inspiring my staff to reach their potential is very high up my agenda. I set high standards for myself and I do not apologise for endorsing the same for my colleagues too – we constantly remind each other that in order to stay at the top we must embrace change and continue to improve. I keep in mind that a failure to develop will mean that I am not good enough to do my job in 12 months’ time.
I had a varied career before I turned to law and the Ombudsman which has stood me in good stead, but I rely on the lessons that I have learned most of all from my parents and grandparents. Work ethic is very important to me – talent is redundant without work, and I press upon my team the importance of determination, perseverance and having a positive attitude. These ingredients are the most important of all and I speak about them relentlessly with my colleagues.
As an Ombudsman, often the closest thing to products that we sell are our decisions and our customers are consumers and businesses. Many businesses have the luxury of trialling their products so that their customers are happy with their purchase every time – unfortunately however, we don’t. We appreciate that sometimes our products come with a sharp edge and some of the time our customers won’t like what they receive, so we must work tirelessly to ensure that everything about our service is as good as it can be – including how we communicate and explain our decisions.
What was your main motivation behind specialising in consumer law and what is the most rewarding aspect of your role?
During my studies, I had intended to move in to employment or criminal law. These areas interested me the most and consumer law wasn’t included in any of the curriculum at undergraduate or on the BVC. Soon after being called to the Bar I took up an in-house legal counsel role which evolved into a managerial position soon after with the Ombudsman. Although I continue to feel passionately about law, I love the responsibility of running a company too. I am lucky that my role requires me to stay on top of the law but I can also be incredibly creative from a commercial and leadership perspective. I enjoy working with some excellent professionals and I take great satisfaction helping to nurture our brightest talent whom I hope will develop in to the leaders of tomorrow.
As Liveryman at The Furniture Makers’ Company, how important is it to enforce industry standards on the younger generation; do you find the younger generation have any common misconceptions in regards to retail and trading standards?
I was the first member of my family to study law and whilst this has helped to create opportunities for me personally I do not believe that a university education is the be-all and end-all. There is a considerable skills shortage in the UK and more needs to be done to educate young people that there are other routes to a fulfilling and successful career that don’t require a degree. As an Ombudsman, we stand with a foot in two camps; the consumer landscape and the industry. Dedicating some of my time to both helps me to stay connected and in the case of the Livery, helps me to give something back. Through its network and relationships with universities and schools it is working hard to encourage the next generation to consider a career in the industry. Here at the Ombudsman, each year we open our doors to work experience students who want a taster of what it might be like to work in law or ADR. It also gives us an opportunity to understand what young people are looking for from potential employers.
What do you think the impact of Brexit will have on consumer law, consumers and retailers; do you predict you will be dealing with a rise of certain cases once Brexit has taken effect?
In regards to the price of goods, uncertainty might lead to downturn in spending. If Brexit creates a crash in the housing market consumers might start to feather their nest rather than move – which might lead to an increase in high street sales.
Brexit, Trump – unchartered waters – unique and historical pages are sure to fill the constitutional law texts in 200 years.
Black Friday has only recently become a craze in the UK over the past few years; what has the effect been on retailers and have you ever had to deal with any cases in relation to the huge discount weekend?
Black Friday is a good opportunity for consumers. Inevitably when sales go up, proportionately so do complaints – but the impact on us has been negligible.
ADR is obviously a very important component of settling disputes, but what stance do you take if the trader does not offer ADR as an option?
The European Commission had intended the Alternative Dispute Resolution (ADR) Directive introduced in 2015 to bring some form of harmonisation across member states where there was no, or only partial, ADR available. Some new schemes emerged, potentially to exploit the creation of a new ADR market place. Unfortunately, as with many market places a race to the bottom on fees can be created which can lead to the loss of quality, specialism and expertise; it is the ADR equivalent of junk food. For us however it is business as usual. Ours is a voluntary scheme and we have the largest coverage in the country. Law now requires businesses to sign post to an ADR provider but does not oblige businesses to engage – it stops short of making ADR mandatory which has pros and cons.
Some ADR schemes, particularly the newer ones, boast that they will look at cases even if the trader is not a member or does not engage in the process. This is flawed logic – unless both parties are complicit in the disclosure of evidence it is impossible to safely pass judgement or make a decision. To suggest otherwise is harmful to everyone involved, so we will only offer our services to consumers who have shopped with a business that has made an unequivocal commitment by signing a contract of membership. This is underpinned by the Consumer Protection from Unfair Trading Regulations 2002 which means that consumers can trust our decisions and it helps to create certainty.
The Ombudsman is there to ensure that consumers have an additional layer of protection; what commonly goes wrong that results in consumers needing extra help and protection?
Our service is set up to inspire consumer confidence and raise industry standards. Often the actual parties in dispute are best placed to resolve the issues themselves – so part of our work includes providing advice to businesses in the form of training and telephone support. This helps traders to identify their legal obligations to consumers so that they are best placed to resolve issues at the earliest opportunity. If all else fails, consumers can approach us if they reach deadlock with the business – or if no resolution has been agreed after 12 weeks. We are an alternative, or a step before the court process – so many of the cases that we see involve big-ticket purchases such as furniture, kitchens, bathrooms, electrical goods and other home improvement projects.
As an Ombudsman, what type of complaints do you deal with on behalf of consumers and how does this compare to resolving disputes for businesses; what different approaches do you take?
Often when a consumer uses the court process their lawyer doubles as a counsellor, taking some of the emotion out of the process and managing their client’s expectations along the way. What might have started out as 10 issues may have been reduced to just a couple by the time the matter is in front of a judge. With the ombudsman process, however, there is often no such adviser in place, so all of the emotion and all of the issues that the consumer feels are justified (but might not be legally) remain an issue throughout. It therefore falls on us to provide that layer of support to those who use our services, helping the parties to understand what our decision is and then to justify it. An important part of a judge, or an ombudsman’s job is to help the parties to understand that they actually comprehend their side of the argument – without this, it is difficult to gain their trust and respect.
What are the main concerns and aspects you must consider when working with big corporations, such as Tesco and Marks and Spencer?
We work with businesses of all shapes and sizes – we are very proud of that – but there is one common thread that ties them all together; each of them trusts us with their prized asset – their customers.
The start of 2016 saw anticipated revised guidelines in environmental health. For the first time, courts in England and Wales have comprehensive sentencing guidelines covering the most commonly sentenced health and safety offences and food safety offences. Nobody enjoys the dire effects of food poisoning and the mere thought of consuming contaminated food, rings several bells with health officials; as a consequence, this can result in a far more complex legal segment in which expert witnesses, such as our next guest, are challenged to investigate in the most intricate of scenarios.
Here Lawyer Monthly hears from Dr Belinda Stuart-Moonlight, Managing Director at Moonlight Environmental Ltd, a UK-based firm providing expert witness services, as well as consultancy, auditing and training services in food safety and workplace safety.
Can you detail what are the most common types of environmental or food safety cases in which you serve as an expert witness?
There is no typical case for which I receive instructions, although the majority concern some form of contamination, be it microbiological, physical or chemical. I work in the criminal and civil arenas (holding the CUBS Cardiff University Expert Witness Certificate in both) and have a roughly 50/50 split of claimant prosecution/defence cases. Examples of my expert health/hygiene reports include:
What are the primary steps and obstacles in obtaining evidence and facts in order to provide a thorough analysis in these cases?
I would normally receive instructions and a bundle of evidence at the beginning of a working case. The bundle might be a modest few pages or several boxes. Every document is logged as I work with my PA to start a case file. This logging process is very helpful because it gives me the opportunity to understand what evidence is available whilst I create a ‘shopping list’ for my instructing solicitor. This is the list of questions, evidence and requests that would enable clarification of my opinion.
I find that in criminal cases my shopping list is often much shorter than in civil cases, as I am usually provided with much of what I need at the start. Additionally, with tighter timeframes, progress is quicker. In civil matters, it can take years to resolve the issues in my shopping list and obtain the requested evidence.
If it is necessary for me to visit a site, for instance, to look at a kitchen, a resort layout or a hygiene system (such as laundry or swimming pool/spa plant), the sooner the better. This is because the closer to trial it takes place, the more time and money is wasted on ifs and buts. Site visits are extremely helpful. A picture may paint a thousand words but a site visit trumps that every time. It also enables me to speak more convincingly in the witness box with the benefit of first hand experience.
There are a number of obstacles in obtaining evidence in a form that helps me analyse a situation. Sometimes, evidence is simply not available or does not arrive until the very last minute. Sometimes it is illegible, but what I have most difficulty with is when it appears fabricated. This can be difficult to challenge in the absence of other smoking guns.
Are there particular challenges involved in these analyses?
In larger outbreak cases, I am often appointed as a breach expert. I complement medics and microbiologists whose evidence primarily concerns causation. It can be tricky to coordinate our opinions; it’s a bit of a chicken and egg dilemma. I am needed to look at what has gone wrong in hygiene control systems, whilst the medics/microbiologists work out what bug(s) caused illness. It’s not difficult if there are clinical specimens confirming the culprit, but where there are only symptoms of illness and no bug, a range of possibilities arise. Failures in hygiene control can tell a story and narrow down the likely possibilities. Case conferences at an early stage are invaluable in exploring the evidence and leading us in the right direction.
In the more extensive civil cases involving, for instance, catering on an industrial scale, there can be large volumes of records to be analysed. This is not difficult, but just time consuming to set up spreadsheets and cross reference hundreds of documents. Norovirus cases can be particularly difficult because the virus is spread environmentally as well as through food. This means that general cleaning and hygiene records need to be analysed in addition to food control records.
Can you detail the ins and outs of two specific cases you have been instructed on and the complexities therein?
Case 1 (Criminal)
A recent case involved a food poisoning outbreak amongst a gathering of members of a charitable organisation. Within a few hours of eating a three-course supper, many members suffered diarrhoea and vomiting. The EHO was called and visited the caterer, procuring several food samples from the previous evening’s dinner. These were duly analysed and a pathogen (Clostridium perfringens) matching the sufferers’ symptoms was identified.
A criminal case was instigated citing the placing on the market of unsafe food (Article 14 EC178 2002). The EHO and the Health Protection Agency (as it was then – now Public Health England), invested considerable resources on the investigation. What they hadn’t realised (or failed to take notice of) was that the sampling protocols that should have been followed had been compromised and the integrity of the samples, upon which the case was based, was flawed. A detailed analysis of the continuity of evidence and the data logger temperature graphs revealed samples had been kept in a warm staff fridge. Additionally, custard and soup samples were muddled in the laboratory. With such evidence, the impact of my report enabled the Defendant to avoid prosecution for the unsafe food offence.
Case 2 (Civil)
‘Mr Eric Swift and 15 Others v Fred Olsen Cruise Lines’ – this case was originally heard in Birmingham County Court and was then subject to appeal. It concerned a claim for damages following Norovirus outbreaks on successive cruises on MV Boudicca. I was instructed by the Claimants’ solicitors to provide a health and hygiene report looking at the control of Norovirus on the ship. This was in terms of both the quality of the control plan/policies, as well as the records of implementation at the relevant times.
I looked at how public areas, cabins and back of house areas were cleaned and disinfected. Additionally, I looked at how much time and what resources had been employed to enable effective decontamination during cruises and between cruises. The questions of parity with industry standards and compliance with international public health requirements were also reviewed. I was able to show that if early warning alarms had been better acted upon and complacency dispelled, subsequent outbreaks would probably not have occurred.
The original trial found in favour of the Claimants and the appeal by Fred Olsen Cruise Lines was unsuccessful.
What do you believe makes you the go-to expert for food safety and infectious ingested diseases?
