Understand Your Rights. Solve Your Legal Problems
The lawsuit asks a federal court in Boston to block the “Northeast Alliance” partnership which was announced in July 2020 following its approval by the US Transportation Department. The suit takes aim at American Airlines, arguing that the alliance would dramatically increase prices for consumers.
Both American Airlines and JetBlue have said they will contest the suit which comes as an especially big blow to the airlines at a time when the pandemic has caused sales to plummet and the future of air travel remains unclear.
Robin Hayes, CEO of JetBlue, argues that the “Northeast Alliance” has actually resulted in lower fares in the Northeast. However, the Justice Department has said that the alliance would create a de facto merger in the Northeast and combine the airlines’ operations at Boston Logan, John F. Kennedy, LaGuardia, and Newark Liberty — all of which are major airports in the region.
The lawsuit signals the Biden administration’s interest in injecting greater competition where American Airlines, alongside three other major airlines, control 80% of the domestic air market.
Eleanor Weaver, CEO of Luminance, explains the benefits of AI for the legal sector.
The role of General Counsel and in-house lawyers has expanded dramatically over the past few years. Whilst before, GCs were considered specialists to be consulted on specific legal issues, now they are seen as business enablers, helping to navigate complex legal and regulatory issues for their organisations. Indeed, the 2020 ACC Chief Legal Officers Survey found that 93% of GCs are now members of their company’s executive management team. To keep up with this vastly expanding mandate, many GCs and their in-house legal teams are turning to new technologies to enable them to proactively solve complex business issues.
The explosion in enterprise data creation and storage means that we are producing data at an exponential rate. Every interaction we have online leaves a trace – on average, every human created at least 1.7MB of data per second in 2020. This explosion is having a growing impact on in-house teams, who are now required to analyse a huge variety of legal documentation to understand exactly what information is contained within their contracts. Using manual review methods, the whole review is slowed down and the risk of missing something crucial is exacerbated.
And in an age of increasing data protection regulations such as the Global Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA), the financial and reputational damage for non-compliance can be crippling for companies. In October 2020, retailer H&M was fined €35.3m for breaching GDPR rules. In fact, a recent survey conducted by EY of General Counsel at 170 UK-based companies found that compliance, data privacy and cyber security are considered the biggest risks currently facing UK legal departments. But despite this, the same survey found that 70% of in-house counsel don’t have the right tools at their disposal with which to face these challenges.
The unforeseen fallout from Covid-19 has also radically changed how legal departments approach and combat key business issues. No longer can they manage risk with manual review methods and remedial action. When the pandemic struck, organisations around the world were underprepared to deal with a situation like it and were thrust into crisis mode, trying to find answers to urgent business issues. For example, in the real estate sector, companies needed to assess their contracts to understand whether they contained force majeure clauses that specifically mentioned a pandemic. Being unable to complete this type of review with enough speed and rigour could open organisations up to potentially hazardous situations in which their tenants could terminate lease agreements early or suspend their regular payment schedule.
Artificial intelligence, which reads and forms an understanding of legal documentation and surfaces key information to the lawyer, has proved vital in helping in-house teams quickly analyse large numbers of contracts for their company, enabling them to identify key risks and areas of non-compliance at a much earlier stage. For example, lawyers can use AI to easily search their company’s data for Personally Identifiable Information (PII) during internal compliance reviews to make sure that they conform to data protection regulations, or instantly redact this PII when responding to a Data Subject Access Request. More than this, AI drastically increases the speed of review and decreases the resources required, allowing lawyers to hone in on strategic priorities and make informed business decisions.
Lawyers now need to be embracing innovative technologies to ensure their businesses remain compliant with external operating requirements. For example, manipulation of the LIBOR rate following the 2008 financial crash has resulted in its phasing out by the beginning of 2022 – a contractual nightmare for in-house teams that need to assess their organisation’s LIBOR exposure manually but made manageable with AI that can read vast datasets and identify LIBOR provisions.
And further regulation is anticipated in the form of new sustainability rules, such as the anticipated Environment Bill in England, which will dictate new parameters for waste and resource efficiency and environmental standards for products produced, among other measures. Using AI technology that can automatically identify which clauses and documents are compliant with the new measure will be crucial for legal teams.
AI technology is therefore enabling lawyers to keep more legal work in-house, affording them more oversight of the business conducted within their organisation. This allows them to collaborate more cohesively with other parts of their business. For instance, by having a more efficient way of reviewing and managing customer agreements, in-house counsel can work with sales teams to flag which sales contracts do not contain auto-renewal clauses and when they are due to expire, in turn driving business growth.
Irwin Mitchell found that 8 in 10 in-house lawyers believe technology such as AI will be hugely influential on their organisations between now and 2025. The sheer volume of enterprise data to analyse, as well as the expanding mandate of in-house lawyers, has meant that reviewing documents without the assistance of technology is simply no longer feasible – nor desirable. And as growing volumes of corporate data are collected in an increasingly complex world, technology will emerge as a key enabler in allowing in-house lawyers to foresee risks and take an active role in advising on business strategy.
According to Law.com, profits per equity partner amongst Global 100 firms averaged at $19,903,000 in 2020, a significant increase of 10.4% from the $1,723,000 average seen pre-pandemic in 2019.
The increase follows 2019’s limited growth of 0.4% over the previous year. Last year, 75 law firms either matched or topped $1 million in PEP, while this year the figure stands at 79.
Law.com has ranked the most profitable firms on its Most Revenue chart, with data for US law firms obtained from the Am Law 100, and other firms surveyed directly. New York-based law firm Wachtell, Lipton, Rosen & Katz sits top of the chart, followed by several other US and New York-headquartered firms: Davis Polk & Wardwell — Kirkland & Ellis — Paul, Weiss, Rifkind Wharton & Garrison — and Simpson Thacher & Bartlett in fifth place.
The highest-ranking non-American law firm was London-headquartered firm Slaughter and May, which came in at 27th.
Ranking 100th was international commercial law firm Yingke, China’s largest law firm in terms of its number of lawyers.
The settlement resolves a case that had been close to heading to trial, with jury selection scheduled to begin on Monday. However, at a September 17 hearing in California, US District Judge Jon Tigar postponed it until November.
The social media platform’s former CEO Richard Costolo and former COO Antony Noto denied wrongdoing in agreeing to settle.
The shareholder’s representative, Tor Gronborg, said: “The jury trial is a great equalizer, even for some of the most powerful entities on the planet.”
Shareholders sued Twitter in 2016, claiming that it had artificially inflated its stock price by deceiving them about user engagement. According to the complaint, the social media platform stopped reporting “timeline views” in 2014 and hid stagnating or declining user engagement.
Following news of the settlement, in early afternoon trading, Twitter shares were down by 3.8%. The social media platform said it expects to use cash on hand to pay off the settlement fee in the fourth quarter of this year.
Lodders’ family team has been routinely recognised as Band 1 in Chambers & Partners and Tier 1 by the Legal 500 for its expertise across the spectrum of family law.
The Cheltenham bespoke family law service will replicate the work already undertaken at the firm’s Birmingham office, best known for its high-end financial remedy work and its expertise in issues regarding children, but offering expert advice on all aspects of family law.
Janice Leyland, who has specialised in family law since qualifying as a solicitor in 1999, has been recruited by Lodders as a senior associate at its new Cheltenham-based family law team.
Leyland works alongside partner and head of Lodders’ Family Law practice, Beverley Morris, who says: “The team’s dedication to personal service and expertise in its field continues unabated. Creating an offering to operate from the Cheltenham office has always been the firm’s plan, and it has been important to recruit at the right level to take this plan forward.”
Morris adds: “Janice joins us as senior associate at the Cheltenham office. Working with me and with on-the-ground support from associate Christine Williams, this team will replicate the scope and quality of family law work undertaken from the Birmingham office.
“She has worked within the field of family law for over 20 years and has an impressive track record with work on behalf of her clients. Her approach will complement the work for all our clients, particularly those within the business, farming and rural communities.
“Janice’s experience and expertise also complement the already strong two partner team, as well as the specialist fields already operated out of the Cheltenham office, including private client, real estate, employment law and agricultural law.”
On the move to Lodders’ Cheltenham office, Janice says: “Lodders is a highly respected firm with a reputation for providing excellent client service, undertaking city standard work from its out-of-city locations.
“In the new role, I am focused on providing excellent client care and building strong working relationships with clients, whilst growing the family law offering in Cheltenham and existing relationships with other professionals across the South West. This is a unique opportunity to use my extensive experience and knowledge from working in a number of law firms over the last 20-plus years, to deliver practical and cost-effective legal solutions to complex and involved family issues.”
Guy Robson, partner at Keller Lenkner UK, discusses Dieselgate and how the past continues to haunt the car industry.
In July this year, the European Commission fined the Volkswagen Group (which includes Volkswagen, Porsche and Audi) and BMW €875 million for breaching EU competition law by colluding in a cartel with Daimler (Mercedes-Benz’s parent company), formed to suppress clean emissions technology being deployed in diesel vehicles. Daimler itself avoided a very significant €727million fine from the European Commission for its part in the technology suppression cartel by informing the authorities of its existence.
The “Dieselgate” scandal (which concerns the use of defeat device software installed in diesel vehicles and allows vehicles to pass emissions tests when they should not have) has already seen Volkswagen and Daimler pay out billions of pounds in fines and settlements around the world to date, yet both manufacturers problems are far from over as they continue to face significant legal actions brought by consumers in the UK and other European jurisdictions. The revelation that the same manufacturers at the heart of Dieselgate were also colluding at the same time in illegal anti-competitive behaviour designed to restrict emissions technology, highlights the lengths to which car manufacturers were prepared to go to protect their share of the market for diesel vehicles. It is clear that not only did these manufacturers put their own interests above their customers’ by cheating emissions testing regimes designed to protect the health of the population, as well as the environment, but that they agreed not to implement the most effective clean emissions technology available for their own commercial gain.
Margrethe Vestager, the European Commission’s executive vice-president in charge of competition policy, said that “the five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions beyond what was legally required under EU emission standards,” adding that the European Commission’s decision “is about how legitimate technical co-operation went wrong,” when it veered into collusion, which “is illegal under EU antitrust rules.”
Volkswagen has indicated that it is considering appealing the decision, though its window for doing this will shortly close. The company told Forbes of its view that the Commission is “breaking new legal ground with this decision, because it is the first time it has prosecuted technical cooperation as an antitrust violation.” All the other manufacturers involved, including Audi and Porsche, have admitted their involvement in the cartel and have agreed to settle with the Commission.
The fines imposed by the Commission in this matter could well have been higher than they were since the Commission was taking into account the novel nature of its case when deciding the appropriate level of fine (it is the first time the Commission has issued a fine for technical cooperation rather than market sharing or price fixing). When asked about the comparatively low level of the fines in respect to the very high turnover of the companies involved, Ms Vestager said, “we have never had a cartel where the collusion was to restrict the use of a technical element. It is fair that when we have a novel case on the one hand, the illegal behaviour is being fined, while at the same time recognising that it may have been more uncertain if or if not this was illegal.”
The Commission found that the manufacturers colluded between 2006 and 2014, during which time the companies deliberately agreed to delay the introduction of cleaner emissions technologies which could otherwise have been rolled out had they been competing properly with one another. Leaving aside the legalistic niceties of the case, the technology in question would have led to cleaner diesel emissions from the vehicles, which would in turn have had a direct impact on people's health and the environment. To put this in context, studies have shown that almost half of deaths linked to vehicle pollution are caused by diesel emissions, to give just one example of the very real health implications stemming from diesel vehicle emissions.
While the decisions to engage in the emissions technology cartel and install defeat devices in vehicles were taken a long time ago, the true extent of the behaviour of the diesel car manufacturers is only becoming clear now.
Eight years later, on Friday, Gangakhedkar was testifying at the criminal trial of her former employer, Elizabeth Holmes, the CEO and founder of Theranos Inc.
Gangakhedkar’s testimony is so far the strongest testimony connecting Elizabeth Holmes’ actions to charges that she lied to investors and patients about the accuracy of Theranos’ blood-testing machines. Holmes has pleaded not guilty to all charges. However, if convicted, she faces up to 20 years in prison.
Criminal defence lawyer James Melendres said Gangakhedkar was worried about Theranos’ criminal liability as early as 2013. Gangakhedkar served as manager of assay systems at the company, directly reporting to Holmes and meeting with her several times each week. Gangakhedkar, who was employed by Theranos for eight years, testified that she made Holmes fully aware of the serious inaccuracies and failings of Theranos’ machines. These claims were supported by emails displayed for jurors on Friday.
Gangakhedkar said she felt unrelenting pressure to approve the company’s blood tests leading up to its Walgreens launch. When asked, Gangakhedkar said the pressure stemmed from Ms Holmes.
In 2016, in a suit that is now settled, Walgreens sued Theranos after it shut down around 40 of the company’s blood-testing sites in Arizona.
On Wednesday, an unanimous three-judge panel of the 1st US Circuit Court of Appeals said it was ambiguous whether employee Margaret Benson’s attendance lapses were excusable under Walmart policy because they were a result of a pelvic injury which she sustained whilst working at the store. The panel said that a Maine district court judge should have no granted summary judgement to the retailer.
Benson’s claim of disability discrimination was revived by the court along with her allegation that Walmart had unlawfully retaliated against her after she complained that she was being harassed for being absent from work for medical reasons.
According to court filings, Benson was hired by Walmart as a cashier at one of its Wingham, Maine stores in 2013. The following year, Benson injured her pelvis whilst at work and took a leave of absence, followed by another approximately 18 months later. Around the time of her second leave of absence, Benson filed a lawsuit accusing Walmart of failing to accommodate her disability. However, the case was ultimately dismissed.
Benson returned to work in 2016 while the lawsuit was pending. However, she was absent, or missed at least two hours of a shift, on 12 occasions in two months.
Benson claims the store manager screamed at her for not properly notifying the company of her absences, at which point Benson went to human resources to complain that she felt she was being harassed.
Two months after her meeting with the store manager, Benson was late or absent on several other occasions and was then fired. Benson sued Walmart in Main state court in 2019, accusing the retail giant of disability discrimination and retaliation in violation of state law.
Summary judgement was granted to Walmart last year by US District Judge Lance Walker. The judge found that attendance was an essential part of Benson’s role at Walmart as a “people greeter” and that she was not qualified for the position.
Benson appealed the judgement, arguing that many of her absences from work had been authorised under Walmart’s attendance policy because they were related to an injury she sustained at work.
On Wednesday, the 1st Circuit panel said it was unclear as to whether Benson’s absences were acceptable, and whether Walmart’s policy applied to illness caused by medication prescribed to treat an injury that had been sustained at work. As such, the lawsuit was revived.
The scheme was launched in partnership with the Planning and Environmental Bar Association (PEBA) and will work to encourage university students from underrepresented backgrounds to consider careers as barristers.
Field Court, Cornerstone Barristers, Francis Taylor Building, Kings Chambers, and Landmark Chambers will all provide mentorship to students, advising on the process of successfully becoming a barrister, especially one that specialises in planning, property, and public law.
Candidates will receive one-to-one meetings with their mentor as well as a workshop on applications for pupillage, and the opportunity to attend social events with their mentors and other students on the programme.
The scheme is scheduled to run between October this year and June 2022. Applications will open midday on 8 October, with all undergraduates and postgraduates from underrepresented backgrounds, who are yet to secure pupillage, welcome to apply. This may include women, LGBTQ+ people, people from minority ethnic backgrounds, people with disabilities, people who spent time in care, people from disadvantaged socio-economic backgrounds, and people who attended a state school.
Paul Ridout, Partner at Hunters Law LLP, weighs up whether social enterprise clients would be better off as charities.
When we advise clients who are trying to get a voluntary organisation off the ground, one of the first issues that we address is the choice of legal structure. There has been a growing demand for corporate structures in recent decades, often driven by a desire to offer more protection for the promoters against personal liability but sometimes on account of the advantages of being able to do business in the name of an organisation rather than through the promoters themselves.
Corporate charitable structures have been available for many years. Indeed, some of the oldest charities in England and Wales are corporations formed by Royal Charter, and it has long been possible to establish charitable companies and charitable registered societies. More recently, of course, the new CIO structure has been in use for over eight years and has proved to be extremely popular, combining the advantages of corporate status with a simpler regulatory regime than that which applies to charitable companies.
Where things tend to get more complicated is where a client has a non-commercial project but is not convinced that a charitable structure is appropriate. This situation may arise where the founder is, in essence, an entrepreneur who wishes to retain the ability to earn a living from the business while still exercising control over it at board level. In other cases, the client may have activities in mind that are simply not suited to the constraints that come with charitable status.
Readers will be aware of the community interest company (or CIC), a creature specially designed for social enterprises and introduced by the Companies (Audit, Investigations and Community Enterprise) Act 2004. In many respects, a CIC is like a commercial company, with some refinements to make it suitable for businesses that want to do good for the community. While it must satisfy a “community interest test”, it can have aims far wider than those recognised as charitable and so the structure offers significant flexibility.
The directors of a CIC may be paid, and investors can receive a modest financial return, but it remains an asset-locked body and is subject to limits on dividends or interest that it can pay out, and its assets can only be distributed to charities or other asset-locked bodies. For these reasons, CICs are recognised as being appropriate for a wide range of voluntary sector bodies that deliver benefits to the community.
CICs are not, however, entitled to tax reliefs in the way that charities are. There is also a tendency among grant-making organisations to decline to support CICs specifically because they are not charities, which puts more onus on the grant-maker to take steps to ensure that a grant is applied for charitable purposes.
We have seen a number of instances where an initial decision to establish a CIC has been followed by a realisation that, in many respects, the organisation has been operating in the same way as a charity:
This can be accompanied by an awareness of the fiscal advantages enjoyed by charities, including eligibility for Gift Aid on donations, exemption from corporation tax and Stamp Duty Land Tax (SDLT) as well as mandatory relief from non-domestic rates. And it is not possible to be a CIC and a charitable company at the same time – the two are mutually exclusive.
Until 2018, a CIC wishing to switch to being a charity would have had to set up a new charitable entity, apply to the Charity Commission for its registration as a charity and then, usually at considerable expense, transfer the business of the CIC to the charity. This might involve having to secure the agreement of the CIC’s landlord, funders and contractors to the transfer; if there were employees in the CIC, the parties might also have to go through formal TUPE consultation procedures for the transfer of employees to the new entity.
In 2018, the legislation relating to CIOs was amended so that it was, for the first time, possible for a CIC to convert directly to being a CIO, in the same way that a charitable company could already convert. The key advantage here is that it is a genuine conversion, and there is no need for a new entity to be created and therefore no need for anything to be transferred. That certainly simplifies the legal aspects of converting, but it is still not a particularly fast or straightforward process.
The Charity Commission and the CIC Regulator need to be lined up to make the conversion happen smoothly, and we have experienced a few hiccups in this regard where the application to the Commission is reviewed by someone who is not familiar with the conversion mechanism. However, nearly three years down the line we are finding that the procedure is relatively painless and is certainly less complex than the pre-2018 options.
If you are advising any CICs who you think might want to consider charitable status, it is worth having a look at the Charity Commission’s step-by-step guidance on the conversion process at https://www.gov.uk/guidance/convert-a-community-interest-company-to-a-cio.
