Understand Your Rights. Solve Your Legal Problems
Private equity firm Beaubridge is leading a GBP 2.5 million investment in Florismart, an online marketplace connecting florists throughout Europe.
The Florismart platform is designed to allow florists to come together to create a competitive marketplace between suppliers resulting in greater product choice and improved prices for the florists with all their purchases delivered direct to their premises overnight. The concept is enabling florists to act in unison and use their collective buying power to compete with the major retailers in the EUR 20 billion flower industry.
Capital Law advised the Company, Florismart, and its existing shareholders on the investment it received in this fundraising round. Tom Kelleher, Partner in the Corporate Team at Capital Law, led the transaction, assisted by Jordan Thomas. Tom deals with all aspects of corporate law specialising in venture capital and private equity transactions. Capital Law believes that the investment gives Florismart an excellent platform to continue its growth and development and to build on its successes to date. The extensive knowledge and experience of the new investor team, combined with the existing management team led by Steve France, will enable Florismart to continue its rapid rise in this historic and changing market.
Steve France, CEO at Florismart, says: “We are delighted with the progress the business has made over the past few months and this round of funding will allow us to develop the business faster and maintain the current growth trajectory.”
Novomatic announced the acquisition of another major player in the German market, Casino Royal Group. The Austrian gaming operator Novomatic has expanded its German presence with this acquisition.
The German Federal Cartel Office recently approved Novomatic’s purchase of the Casino Royal Group, one of Germany’s largest gambling hall businesses. Casino Royal operates around 3,500 gambling machines at 130 locations, with a particularly strong presence in the state of North-Rhine Westphalia.
Novomatic already controls the Admiral Play Halls business in Germany, and the addition of Casino Royal, which generated revenue of €102m in 2016 and employs around 1,000 people, makes Novomatic the country’s leading operator of gambling halls. Novomatic is a publicly listed and award-winning technology company that was founded in 1980. They employ over 28,000 employees over 50 locations.
According to the company’s annual financial report, published in April 2017, Novomatic achieved the highest revenues in its 36-year history. Revenue in the past financial year 2016 reached EUR 2,294.1 million, corresponding to a year-on-year increase of 10 percent. Novomatic also pulled off its biggest deal yet by acquiring a majority stake in Australian gaming device supplier Ainsworth Game Technology (AGT) in 2016.
Weinhold Legal, Divjak, Topic & Bahtijarevic, and Selih & partnerji have advised on the merger of entities within the Olympus group, as Croatia's Olympus d.o.o and Slovenia's OLYMPUS SLOVENIJA d.o.o. merged into the Czech entity, Olympus Czech Group, s.r.o., clen koncernu. The merger was registered on 1 March 2017.
Selih & partnerji worked as Slovenian lawyers on the transaction, along with Weinhold Legal as the Czech lawyers, and Divjak, Topic & Bahtijarevic as the Croatian lawyers. The Weinhold Legal team in the Czech Republic was led by Managing Attorney Ondrej Havlicek and Partner Martin Lukas, the DTB team in Croatia by Lawyer Martina Kalamiza and Trainee Daniela Marasovic. Selih & partnerji team was led by Partner Natasa Pipan Nahtigal and Senior Associate Jera Majzelj, both from the M&A practice area.
Tax services were provided by EY under the lead of Rene Kulinsky and Martin Hladky.
More and more companies are pushing into new territories, counting on their ability to buy in talent and new business to expand. This has always been the case but now we are seeing increasing investment and risk taking on less developed countries, on a more frequent basis. In these transactions, you have the same issues as in traditional local markets, but more need for true local understanding, the best local and regional advisers and the ability to have strong legal, accounting, and finance teams in place to support and guide the businesses forward and also to assist them crucially in growing out of their home markets with their products and services.
This month, Erik Lazar, Director and founder of Transatlantic Law International (TALI), a global business law provider in more than 95 countries, explains how he and his firm are able to do this. TALI’s global presence and footprint in more countries than most with experienced teams in most major countries. he and his firm have considerable experience in making cross-border deals work and also always identify sound local accounting and tax partners that their clients can work with to support the acquired businesses going forward.
What are the most important factors to success in a cross-border transaction?
For a company, knowing the target inside and out to the greatest extent possible before the lawyers are brought in, if possible, is the single most important factor in my view.
Many deals have negative effects because they are driven by the desire to gain revenue streams quickly without looking at the target or the personnel or substance. AOL – Time Warner is a classic example on the macro side, but there are multiple smaller deals including single country deals which fall victim to what I call deal fever vs. sound analysis and motivation.
The other key factors are organising the deal team and all disciplines in advance, deal team coordination and getting the tax and finance due diligence done first, if possible - at least on a high level - before pouring on and in the other team resources. If the numbers don’t work, there may be little sense proceeding. In a cross border-deal cultural understanding and local knowledge are also critical.
How do you achieve effective communication and ensure a deal runs smoothly?
In the best of worlds, a company would structure a deal team in advance with key team leaders for each discipline (tax and finance, legal, environmental, IP, risk and Insurance, technology, HR assessment etc.) and integrate those teams in advance with the legal team head in these areas. Priorities should be set so that overall deal spend is minimized by concentrating on what is most important and rolling out due diligence in a stages as the most important issues become clear.
The reality is that most companies continue to move a deal as quickly as possible so that there is an ‘all in – all at once’ approach with teams working in parallel feeding into the central business team and not necessarily a great deal of communication – what is called the silo structure which means teams work alongside each other and only communicate at certain stages.
How you bridge the gap is relatively simple on the legal side – you have to make sure you have an effective overall team head and the best communicators as your specialist legal team and then make sure you have clear communications loops with the company and have regular updates so that all key issues and positions are filtered into a funnel leading to the SPA or APA which after all reflects what the deal is.
This creates in real time a running and constantly updated list of key deal issues and solutions. Indeed this is what we do and most experienced M&A counsels should do. It’s intuitive and simple if you have the right people on board which is a prerequisite of course for any such exercise.
We are also a big fan of getting to the key management sites and speaking to managers and employees early on, as the best due diligence is face to face without the investment bankers present – you get much more true information that way (the old fashioned way) than through a data room virtual or physical.
What are the common reasons transactions are cancelled after due diligence?
The core factors for failure at the d/d stage remain fundamentally the same with some shifts due to technology and changes in laws. The biggest reasons involve the numbers - i.e., the accounts, sales and contingent liabilities including hidden tax and social security charge exposure or sales tax non-compliance for example.
After that, there may be particular issues about the products or services or the supply chain, including over-reliance on certain products or supplies in the revenue stream. There may also be an over-reliance on a core set of customers.
After that you have typical issues with the inability to unwind certain assets or commitments or too complex a corporate structure so that the target should be restructured before the deal.
The usual hidden liabilities such as ethical issues and environmental problems could also be deal killers, of course. Most of these can be rooted out by a sharply focused upfront approach to deal making if one has time and the buyer is open to it.
Finally, new technologies and the ability of companies to operate globally and expand quickly, but not necessarily in accord with local law, can create issues including reliance on sales where not operating legally, lack of attention to consumer or other laws even where properly registered, lack of local licensing, poor attention to data protection; and again, security and cyber security issues or lack of the right personnel in the buyer and / or seller to deal with these issues if the company is moving internationally but too quickly.
What continuing legal support do you recommend after investment and why is this important?
The single most important challenge which seasoned acquiring companies often do very well is restructuring - or indeed they can allow companies to continue on a standalone basis if a portfolio approach is taken, but in a reorganised structure. In both cases, continuing outside legal support is vital as well as putting into place a cost effective legal team which is dedicated to and tuned into, the objectives of the buyer.
This is important because prior counsel would have been aligned with prior management (usually) and owners (more particularly) which creates a de facto and ongoing conflict in interest, both in terms of defending the status quo and management carried over, and also in managing any ongoing warranty and related issues, where the sellers are carried over management, or are significant personal shareholders in the new operation.
What we do is to provide a day to day service team immediately after the deal to support the acquired business on all corporate, commercial, labour, employment and related matters, through the transition and structuring. The team is led usually by the specialist counsel who engaged in the due diligence in those particular areas, as they will already have had familiarity with the company and hopefully have built relationships with the acquired management. The service team has to be lean and suited also to local management with costs brought down so legal support is in fact a benefit and not a burden, which we are also careful to do.
For the buyer it’s critical to take such an approach to make sure that issues are spotted early, buyer norms are being implemented across the board in everything from commercial terms to approaches to labour and employment issues and also above all in policies and company values as set out in rolling out compliance and ethics guidelines. In this way one also has an immediate team in place for the next deal in that country, our advantage being that we cover over 95 countries and more world-wide.
Will Brexit have any effect on cross border M&A in Europe?
If the United Kingdom remains in the EU trading zone or gets an equivalent offer (most likely by having to accept the primacy of EU law or certain EU laws), then there will be very little effect. On the other hand if not, then the UK will be likely seen by European business as another ‘third country’, albeit an important one for trade and there should be an impetus of buyers to focus on the UK as a separate single country market. That would increase M&A which is European law based and decrease M&A which is UK based. However, while predictions now cannot be relied on, contingent thinking and planning is a requisite. As the UK will continue with all EU laws and regulations being adapted as ‘local’ laws and eliminate them only over time, there should not be any short term effect in how M&A works in the UK for the relative short and medium term going forward in a legal sense. However, cross border filings in Brussels for multi-country acquisitions may either be eliminated (if the UK is seen as a separate country) or compounded (if a UK separate filing is needed, and also multiple European filings or a single Brussels filing). As noted, one can only surmise at this point and plan accordingly.
In this edition, we speak with Jenifer Swallow about her role as General Counsel at TransferWise. She passionately expresses the joys of her role and how she sees the FinTech sector advancing in the near future. We speak with her about how TransferWise is close to transforming the world of international money transfers, how she works towards the best outcome for her customers and the company and the challenge behind competing with banks. In this insightful interview, Jenifer reveals many key outlooks for lawyers to bookmark, as well as touching on the ever-present threat of cyberbullying and cyberattacks.
Can you share with Lawyer Monthly what is the most challenging aspect of your role and how you overcome the challenges you face?
There are loads of fun challenges. When I joined TransferWise in 2015, I was the first in-house General Counsel. Handling a huge workload at speed was something I was used to, but this was something else, particularly as I stepped straight into our Series D funding round and took on responsibility for the HR function.
Part of the challenge of handling the work volume has been figuring out the role of legal in the company. This is still very much work in progress, but it’s been a fascinating process.
TransferWise had done very nicely before I joined, so imposing a playbook from my experience elsewhere, or ‘how other people do it’ simply wasn’t going to cut it. Learning how the company thinks, how it gets things done, what is important to it and most of all, what will best serve our customers, have been key to understanding where to lean in, where to support from behind and what to come back to later.
The other massive challenge has been recruiting the right people. How do you hire for an environment that’s fast paced, ambitious, with a culture of autonomy and questioning everything, as well as being belief-driven that everything we could must serve our customers? One of our mantras is ‘it’s not a job, it’s a revolution’. So, I’m hiring for people with a different perspective than the norm. It feels like a unicorn hunt, but the legal team is now five people strong and growing, so it’s possible.
What do you think is key to becoming a successful legal expert?
One of my biggest learnings at TransferWise has been in seeing that with the right context, the best answers will often come from the wider team, not just from the lawyers. This kind of turns the concept of being an ‘expert’ on its head.
Of course, sometimes the lawyers have to say ‘don’t do that; do it this way’, but for our team, the value we add is in providing a different dimension of thinking – a different perspective on a problem - asking the right questions and providing the context in which the right answer can emerge.
That said, I truly appreciate having lawyers on the team who are truly knowledgeable in payments, amongst other things. Lawyers like Candy Ma in the UK and Andrea Gildea in the US, understand why the regulations say what they say and how they interact, they understand how our regulators think about risk and they understand how to apply all that to find practical solutions to the problems as they present themselves.
What is the most exciting aspect of working with growing companies? How do you ensure that the counsel you offer will not only comply with regulations but also be the best commercially based decision?
No two days are the same with companies scaling at this pace. When I joined, we had 300 people in just a few markets and now we have 700 across many more. It’s certainly an exciting journey.
One of the awesome things about TransferWise is that pretty much everyone is interested and engaged in legal and regulatory issues. The company was founded to bring fairness to finance, which means we have ethics very naturally at our core. For a lawyer, that makes your job very easy. It feels like we are truly bringing the future of finance forward.
In many markets, we are out there on the edge of what has been done before so it’s a question of making sure we understand local regulation and interpret or evolve it where it doesn’t fully cover our business model or serve our customers. One major aspect of this is figuring out how to ensure our product(s) feel like the same product wherever you are in the world, even though the legal framework is very country-specific. Eventually, there will be a single standard and maybe even a single currency, but until that day, we have to try to make life as easy as possible for customers, though the reality under the bonnet is far from easy.
I am constantly saying ‘trust first, law second’ and I stand by that.
In the UK, we are regulated by the Financial Conduct Authority, which is one of the most pragmatic and forward-thinking regulators in this space. We strive for transparency with our regulators and we also have a responsibility to help them keep pace with the FinTech sector and the changing needs of customers, so it’s a two-way thing.
With the fluctuating nature of the financial sector, how do you ensure the best business outcome is made when acting as General Counsel for TransferWise?
For us, the best outcome is what’s right for our customers, whether they are consumers or businesses. Solving the problem of unfairness in finance, starting with international money transfer, is at the forefront of everything we do. Every General Counsel will have their equivalent of that mission.
My job is to help us navigate the industry landscape, build a solid foundation for our revolution and do the right thing for our customers. The landscape may change, but those principles will carry through.
The ‘how’ is a combination of a lot of hard work and relentless collaboration. It’s all about people and relationships at the end of the day.
What is the biggest challenge TransferWise faces and how do you advise your team to take appropriate action?
Apart from the obvious challenges of scaling and the lag between regulation and technology, probably the biggest problem is awareness.
Most people don’t realise what they are being charged when they make payments in different currencies or move money between currencies. Charges are often opaque and there are still people out there claiming ‘0% commission’ and then making money off a bad exchange rate so the service looks cheap (or in fact free) when it is not.
We will not rest until everyone is given clear information, presented in a transparent way so each of us can make informed decisions about what we are happy being charged.
TransferWise competes with banks – from a legal perspective, how difficult can it be to try to ensure customers that the company offers better solutions than worldwide banks?
We are very much against the high fees many of the banks charge for providing a service that’s slow and difficult. And we don’t think it’s fair on customers that they don’t get clear information about what they will be charged. That’s not transparent. We make our fees as low as we can and we strive always to spell out the full price. Our customers tell us they are grateful for that and for opening their eyes to what is really going on. One day, TransferWise-level convenience and transparency will be market standard.
We are highly regulated, have bank-level security and we safeguard customer money at all times. We still have some way to go to make sure every person in the world knows about that so they see there is a true choice. This is something our teams work on every day of the year and the legal team is there to help them figure out how to do that in the most effective way.
How have you seen tech develop for the ease of business? How has this affected your role in the legal sector?
We’re a tech company so we celebrate the benefits of technology in helping us achieve our goals; for example, we work with some great tech vendors on identity checking for anti-money laundering and other regulatory processes. The tech continues to improve every year and our own teams are developing some awesome tech in-house too.
Businesses suffer the same as consumers in cross-currency payments and we feel they deserve the same convenience, speed, transparency and low price point. For that reason, we have a whole bunch of very smart people working on our business product and we have just launched a cross-currency borderless account for businesses to receive and make payments around the world more easily and cheaply.
On the legal team side, we are working with companies to help us with contract management and external counsel billing. There is a huge amount of potential for tech in what we call ‘legal ops’ and we’re also hopeful some of our engineers will build useful AI to help us over time.
We would love to see law firms evolve beyond the arcane billable hour and start to think more innovatively about billing; perhaps tech can help there too.
In what ways are you hoping to see the tech world advance? Do you see these changes affecting TransferWise?
It’s clear that technology will play an ever-increasing role in all aspects of our lives. Bots and AI are already changing the way we work. However, there will always be a need for people at the core - wrapping the tech in human integrity will be ever more critical.
For the finance sector, the future is online. People now carry around their bank in their pocket, on their mobiles. Data security will remain a number one priority. E-money is already the norm and face to face verification is fast becoming a thing of the past.
It’s all about convenience and TransferWise is striving to achieve the best way for customers. The law will have to keep up with that too.
You are a founding member of organisation that is dedicated to fighting cyber abuse – what more do you think can be done to prevent such abuse?
All Rise Say No to Cyber Abuse has found that 72% of us have witnessed cyber abuse, 50% of us have suffered it and 80% of us feel online abuse is as harmful as offline, face-to-face abuse. And yet the problem is escalating.
Why is this and what is it showing us about how we are living and our attitudes to common decency?
Almost everyone has an experience of it of some kind. You only have to browse one of the social media platforms for five minutes and you will find inhuman comments right there plain for everyone to see. And yet we accept it.
What can be done? The first thing feels to be to say NO. Just a simple, absolute and collective no to abuse. Everything else will flow from there. There are so many smart people out there to help us with the solutions - the solutions will follow.
Cyber abuse is absolutely devastating for those involved and it affects adults as much as young people. The impact of this abuse can manifest in so many ways: mental health issues, anxiety, self-harm, alcohol and drug problems, even suicide. Businesses and reputations are destroyed with no recourse.
If we tune into the harm cyber abuse is causing – the true human toll - the priority it must be given becomes obvious and awareness-raising is critical to this.
I would like to see a change in the law to make it crystal clear that any form of cyber abuse is straight up a criminal offence. However, the law as it stands today is sufficient; the problem is our tolerance.
Yes, we have many important policing priorities and the volume of abuse is inconceivably huge, but that does not excuse the harm we are allowing.
It would not take much to wake us all up. A blast of prosecuted cases. A realisation that we are not in fact anonymous behind our screens. Zero tolerance by social media companies. A reset on human decency and respect.
Compensation claims rising for non-freezing cold injuries as soldiers told to ignore their symptoms and ‘man up’, with ethnic minorities being particularly let down by MoD’s negligence.Claims for debilitating cold injuries from servicemen in the British army have risen significantly, research from solicitors Bolt Burdon Kemp reveals.
In 2015/2016, the government paid out £1.49 million to servicemen for non-freezing cold injuries under the Armed Forces Compensation Scheme - a 20% rise on the previous year.
Since 2006, 1,235 armed forces personnel have received compensation from the government for this injury. Last year saw a 16.7% rise in the total number of service personnel awarded compensation by the government, and over the last ten years, claims have risen by 1650%.
| Year | 2006/07 | 2007/08 | 2008/09 | 2009/10 | 2010/11 | 2011/12 | 2012/13 | 2013/14 | 2014/15 | 2015/16 |
| Total claims from tariff levels 10-15 | 10 | 33 | 83 | 86 | 138 | 200 | 166 | 194 | 150 | 175 |
| YOY change | 230.0% | 151.5% | 3.6% | 60.5% | 44.9% | -17.0% | 16.9% | -22.7% | 16.7% |
Wet, cold climate
Non-freezing cold injuries (NFCIs) were a major cause of casualties during the Falklands War, which began 35 years ago and occur when people are exposed to cold and wet conditions for a prolonged length of time. When they first landed in 1982, British soldiers had to wade through boggy wetland causing cold injuries. A survey of Armed Forces personnel who served in the war found that 64% of soldiers in infantry units had experienced symptoms of NFCIs.[1]
Lasting impact
Similar to ‘trench foot’ from World War I, the condition affects the hands and feet, and sometimes the genitals. NFCIs can cause chronic pain, numbness and swelling and affect a person’s ability to use their hands and feet. For soldiers, the injuries have a lasting impact on their careers and family life. Soldiers are most often medically downgraded or discharged from duty as they can no longer take part in outdoor activities. Many go on to develop depression and anxiety.
Easily preventable
The MoD has its own guidance on how to reduce cold injuries during outdoor exercises, this includes simple steps such as providing the right cold weather equipment, referring those with symptoms to a medical officer and cancelling exercises when risks are increased. But instead of following the guidance, soldiers have reported being told to ignore the problem and ‘man up.’
Ethnic minorities particularly affected
Soldiers of black descent are 30% more likely to suffer cold injuries than their Caucasian counter-parts. Data obtained from a Freedom of Information request shows that Black servicemen suffered 40.1% of recorded cold injuries in the army, in 2014.[2] This statistic is particularly alarming, considering servicemen of African descent only make up 0.1% of UK forces staff.[3] Abdoulie Jallow is a 28 year old Gambian ex-serviceman who suffered cold injuries during routine military training courses. Jallow was injured in 2012 by the freezing conditions he slept in one night on a combat exercise in North Yorkshire. He didn’t receive a cold weather kit, usually provided to Commonwealth soldiers, until after the exercise.
Jallow recalls: “During the exercise, my legs and hands went numb. I told the Platoon Sergeant but wasn’t taken out of the exercise. I later complained again and was eventually sent to the doctors.”
Jacob Anum, a 39 year old Ghanian, claimed compensation after receiving injuries while on duty in Germany and Canada. Anum performed well in the Army and applied for promotion, despite his injury.
However, as a result of his injury, he was downgraded and subsequently medically discharged.
Despite his successful claim against the MoD, Anum still feels betrayed by his former employers:
“It can't fix the pain that I'm going through now, all the benefit and entitlements that I used to get from the Army. I lost my career and the organisation that I worked so hard to be part of. How can that be fair treatment?”
Inadequate compensation
The MoD provides compensation through the Armed Forces Compensation Scheme, but payouts are usually small (on average, 85.5% less than with civic claims4) and don’t address the long-term implications of the condition.
Ahmed Al-Nahhas, partner and solicitor at Bolt Burdon Kemp says the MoD are failing servicemen and women across the UK:
“The extraordinary amount of claims for NFCIs shows that the MoD are not doing enough to prevent entirely avoidable injuries for hundreds of our brave armed forces every year. Our clients have reported a devastating impact on their lives, including chronic pain, depression, anxiety and loss of earnings. When reporting symptoms, they have been dismissed and told to ‘man up’.”
Bolt Burdon Kemp have created a simple flowchart to help former armed forces employees understand the key steps in both an AFCS and civil claim process.
What are the common reasons for soldiers to avoid legal action?
They don’t understand their rights and they feel loyal to the Service. They don’t want to be seen as a complainer or perceived as weak. Nevertheless, we advise them to consider their legal rights in the context of what they are going to lose and whether their loss could have been reasonably avoided. i.e. it wasn’t their fault.
What advice would you offer those wanting to take legal action but are unsure?
Take advice and then make a decision. You don’t have to oblige yourself. If you don’t; take advice or act quickly, you may lose out.
How difficult is it to claim against the Ministry of Defence?
This depends on the case as they are like any other defendant. I commonly use the phrase “short arms and long pockets” when describing their approach to litigation, and they are often very stubborn. The Courts will try and level the playing field given the size and resources of the Defendant, so it definitely helps to have a specialist on side.
Why do you think ethnic minorities are particularly affected in this matter?
Because they are genetically pre-disposed to NFCI and because they are worried that if they complain they will lose their careers and have to return home (i.e. abroad). I generally advise them to take action early on and make sure their injuries are assessed by specialists.
What do you think the MoD can do to prevent ethnic minorities from being targeted/ mistreated? They can make sure that their line management are well trained and that complaints are taken seriously. Injured soldiers should not be regarded as malingerers. They should be encouraged to rehabilitate and treated like an asset. By training their management and improving attitudes, from the top down, the can better prevent such cases.
There is often demeaning stigma towards the notion of bullying and mental distress, what more could be done by solicitors to ensure clients receive the best outcome post army career?
I would advise them to get specialist treatment. Early treatment tends to result in a better recovery and prognosis. Clients should also get advice from specialist employment and occupational health experts, so that options for future work is considered carefully in the light of available skills and limitations, physical or mental. Psychiatric illness can be as disabling as losing a limb.
If the trauma or injury has been caused by a third party – perhaps another servicemen/woman, how difficult can this make the case?
This depends on the circumstances but sometimes it can make the litigation easier. It depends if the injury was caused in the course of service. Usually in the services, bullying occurs form the top down; when line managers are able to exert control and influence on those who are less able. Sometimes it happens laterally, when colleagues bully a victim because of perceived differences, or sometimes for no discernible reason at all. Service life can be stressful and combined with a hierarchical structure there is often scope for abuse.
What is the best course of action to take?
Sue the MoD as being vicariously liable for the actions of its agents. In many cases, you can avoid having to proceed against the individuals concerned, so long as you can prove the bullying/harassment that occurred and the circumstances (i.e. were related to duties/service).
Can you explain how these cases are challenging, for you and your client, and what you do to ensure the best outcome is received?
All litigation is challenging and risky. The extent of the risk depends on various factors, including the facts of the case, available evidence, state of the law and behaviour of the parties. Ultimately, it is a process of problem solving and this is always made easier when you are being represented by someone experienced, not only in the litigation process, but who has experience of dealing with the particular Defendant; in other words, you want someone who can anticipate what the Defendant might do in certain situations. Service personnel understand this concept well: “know your enemy”.
The prospects of securing a valuable settlement increases when you are being represented by someone who understands their client i.e. someone who only acts for service personnel and understands the ethos of the services, and the particulars losses of earnings, benefits and pension that may be involved in a claim, as well as potentially lucrative post military careers that sometimes come into play. Service personnel understand this concept well: “know yourself”.
Written by Micha Emmett, CEO CS Global Partners
More than any other period in our history, the 21st century has seen – and will continue to see – the meeting of cultures and the merging of economies, marked by ever more free trade and the free movement of people and services. However, with unprecedented global economic and political instability, immigration is a rising concern to many and firmly in the political spotlight, especially in the United States. For the modern businessperson and high net worth individual who often does business internationally and travels regularly, this growing uncertainty delivers its own unique challenges and concerns.
Dual citizenship is one of the most effective means by which these challenges can be overcome and is often either an accident of birth or the result of long periods of continued residence in a host country. Even marriage does not result in dual nationality, unless it is accompanied by extended stays in the spouse’s country. Citizenship by investment, on the other hand, affords individuals the option to obtain a second citizenship without having to subject themselves to lengthy residence requirements.
For the global citizen and modern businessperson, citizenship by investment programs are the ‘insurance policy of the 21st century’ and address the key concerns around flexibility, mobility, and safety. What truly drives the desire for a second citizenship by many high wealth individuals in today’s political climate is the need to have a contingency plan – an insurance policy for themselves and their families – and increased opportunity to truly live as a global citizen.
Today’s most popular citizenship by investment programs find their roots in the tranquil island nations of the Caribbean. St Kitts and Nevis was the first to establish its programme, which was entrenched into the nation’s laws in 1984. Dominica emulated its neighbour in 1993, and Grenada re-launched its program in 2013. Under each of these programmes, a qualified individual, as well as his or her family, may obtain citizenship in as little as 90 days without ever traveling to the Caribbean.
As the earliest program of its kind, the St Kitts and Nevis Citizenship by Investment Program has built a reputation for integrity and quality. The program allows individuals who pass strict due diligence tests to obtain citizenship in exchange for either a donation to the charitable Sugar Industry Diversification Foundation, or an investment in pre-approved real estate. In the first case, the minimum contribution is of USD 200,000, while in the second case the minimum investment is of USD 400,000. Costs vary according to the number of family members applying with the main applicant, and due diligence and Government fees may apply.
Caribbean citizenship is the ultimate gateway to lucrative business opportunities. Not only are St Kitts and Nevis, Dominica, and Grenada all members of the Commonwealth of Nations, they are also members of the Caribbean Community (CARICOM), meaning that their citizens can live in any other CARICOM member state. These three nations are also highly ranked in the World Bank Group’s Doing Business Rankings, with Dominica ranked 101 out of 190 countries.
For the mindful businessperson seeking to protect his or her assets, citizenship of St Kitts and Nevis, Dominica, and Grenada can also provide an effortless means of preserving wealth. None of these nations tax foreign income, personal wealth, inheritance, or capital gains. Moreover, each of these countries respects individual privacy, and is strongly adherent to the rule of law.
Whereas many businesspersons pre-crisis years may well have been comfortable operating in their country or region, today’s economy no longer allows successful businessmen to operate in limited environments. Second citizenship is key to gaining access to new countries, regions, and markets.
Moreover, second citizenship is a practical and worthwhile alternative for individuals wishing to complement their existing wealth protection and investment growth strategies, improve their personal security, and increase confidentiality in their personal affairs.
Micha Emmett is the CEO of leading citizenship by investment global firm CS Global Partners, and a South African and English lawyer with degrees in business and law. Her expertise includes international private client advice, commercial law, property investment, and citizenship planning. Micha has many years of experience in citizenship, residence, immigration, and foreign investment law and has held several senior legal advisory roles across a range of industries. She specializes in providing citizenship planning services to high net worth individuals. Micha has also travelled extensively, providing consultancy services to governments and private firms. The jurisdictions she has worked in include the UK, the UAE, and several Caribbean island nations, as well as countries in Africa, Asia, and Europe. In advising governments, Micha has led professional teams and coordinated the development, delivery, and ongoing management of citizenship programs and projects.
Kenneth R. Baker is a Professional Engineer and licensed General Contractor with a practice in construction and real estate consulting and claims. With knowledge on construction regulations based all over the globe, he speaks with Lawyer Monthly about how the field is developing, where construction can go wrong and what investors in real estate can do to avoid rising costs.
How has real estate risk changed over the years in California? Have regulations become tighter, and if so, what has been the effect of this?
California is a progressive state in terms of technology, politics, natural resources and it is the largest state with the largest population, so it has unique challenges; there are a lot of regulations in place to protect these resources, so builders and workers that come from outside of California are often surprised by the degree to which the process is regulated by the government and third parties. You can’t come in and just build what you want, as California has very specific sets of requirements that don’t exist in other places. For example, hospital construction in California has its own regulatory agency called OSHPD and their regulations are quite unique. Most people who get involved with hospital projects discover the process is very slow; review and analysis is very robust so there are a lot of things that may be done in terms of construction details and the way the hospital is laid out.
There are also regulations that consider California’s long coastline – there is a public governmental Coastal commission regulating what can be built miles within the coastline. That’s a special regularity review which developers and agencies must know. They are aimed at protecting and enhancing the assets that California has; many complain it is very expensive and these regulations add further expense, but they are there for protection. California is not a cheap place to live or do business in that matter.
What are the most common reasons to why construction goes wrong and thus results in legal disputes? What could be done to avoid this?
Different owners have different needs that drives the project, so many times projects go wrong for different reasons. If you’re in the business long enough, you get an idea to what could be going better and if people could alter the way they do projects. In infrastructure projects, public agencies are often involved and as a result the agencies are susceptible to disputes, due to budgets and funding constraints. Money affects how projects are delivered and in many cases these constraints result in alternative delivery methods, where the design is partially done by the owner/agency and then the rest of the design is completed by the contractor they retain. The contractor, instead of just building has to finish the design which can cause problems. Agencies may not be happy with the design, so then the project agency gets involved and try to change and adapt the design that the contractor has developed. Many construction projects agencies have poor management practices like so, which causes legal disputes.
Projects also run into their own problems just because the field is unpredictable. In construction, you can’t control all the variables; for example, regarding foundations and underground work, you have to know the rock and soil and their conditions. You devise reports on what you suspect is underground, but you really don’t know what is underground until you start building. These ‘surprises’ are built into the construction world and you find out later down the line the foundation you thought was perfectly fine, actually is not; everything following cannot go on until the foundation is changed, which delays everything else.
What are the most vital things that clients need during real estate asset investigations?
What is growing fast is capital programmes and risk assessments. Capital programmes are for big companies and governmental agencies that have capital spending on an annual basis. The way in which they deliver projects in this programme often needs updating and could benefit from observing what others are doing, so our services are aimed at helping clients treat their real estate assets to do more with less money and do more with money they have. The services are aimed at how you deploy your capital most efficiently and what aspects are causing problems. A factor business people address is money – they need to get money at an attractive rate and need to know how and when to spend that money. However, technical areas they don't deal with everyday are: external factors - evaluating restrictions on entitlement and regulations when buying property -, and internal factors that affect real estate development, for example building suitable foundations and assessing soil conditions. This expertise is needed; our company has that expertise in all the different areas. You can always short cut some of these costs, but you find out during construction that this can cause more problems in the long run, thus higher costs. Even natural disasters such as earthquakes, can affect building constructions and regulations, as constructions obviously need to be stronger. If you are going to be a smart investor or builder, you want to get the best people on your team who are aware of these little things.
With a denser population and with America being a developed country, how do you see engineering and construction developing? What problems do you see along the way and what changes do you think will be made to adapt to this?
The urban environment and where jobs are have changed. Cities have grown and rural areas have shrunk and advancements in technology have allowed the traditional office-based role to change. Companies are lot more flexible, so offices designs have developed; people are often more global and better accommodated, sometimes working from home. All these developments have changed the way in which construction has progressed, including transportation and travel, due to changes in movements, especially in suburban areas. There are still needs for infrastructure - roads and the energy system are constant in need of updating. Rather than a decrease in commercial construction, we see different types of buildings now and a changed planning mindset and model.
How often is analysis poor, which results in problems in the long run for businesses and corporations? What could be done to avoid this?
Our business focuses on a fact-based analysis, which is driven so our clients make the best decisions. The thing which affects our ability to do our best work is poor budgets. Clients do not always want to spend realistically on things they need. A poor analysis also involves a poor investigation into looking at the things that need to increase the liability. We have adapted ways to help clients to not spend maximum amount of money; the ways in which we do this involves a phased analysis where we tackle the bigger issues and spend money progressively and in stages. We look at the fundamentals, what they’re strong in and the challenges they will have so the money is used to maximum benefit. Business people who are trying to spend their money wisely need to know if their investment is worth it and so we become their trusted advisers and take on the ability to try put ourselves in their shoes. Many people go into a lawsuit due to attitudes and opinions that have been shaped by the project and not objectively trying to see if it is a reputable and economically wise move.
How do you ensure you remain neutral during disputes?
One of the core services we provide is dispute resolution support for our clients, whether they are public agency clients or private owners, contractors, designers - people part of the construction process. My mission is to seek the truth and this serves both sides of the dispute. I try to advise and council clients if they have vulnerable aspects in their claim, but I cannot stray from the truth. I am independent and neutral and not an advocate; as an expert I perceive my role as if I am working for the judge. I try to get to the bottom of the cause and the effects of the project and staying objective is what drives our success in this business. We evaluate the facts, contracts and law and we present that knowing the third party, the judge and arbitration panel will evaluate both sides and make a fair decision.
Mr. Ajjour commenced his career in law from his home country, Syria, and then moved to UAE in 1991 to practice his profession as a Lawyer and Legal Consultant. He has seen UAE develop vastly, in regard to infrastructure, government policies, trade, tourism and so much more. He speaks with Lawyer Monthly about the changes he is excited to witness for UAE and what the effects of such changes will be.
The UAE has significantly developed over the years, what do you think are the main factors contributing to this?
Dubai has changed dramatically over the last three decades, becoming a major business centre with a more dynamic and diversified economy. Dubai enjoys a strategic location and serves as the biggest re-exporting centre in the Middle East.
Its low logistical and operational costs and excellent infrastructure, international outlook and liberal government policies are attracting investors in a big way. Activities such as trade, transport, tourism, industry and finance have shown steady growth and helped the economy to achieve a high degree of expansion and diversification.
The Dubai economy enjoys a competitive combination of cost, market and environmental advantages that create an ideal and attractive investment climate for local and expatriate businesses alike. In fact, these advantages not only rank Dubai as the Arabian Gulf’s leading multi-purpose business centre and regional hub city, but they place it at the forefront of the globe’s, dynamic and emerging market economies.
Dubai’s Key Advantages:
How have equal rights changed the way in which the UAE’s economy has developed?
The empowerment of women has been one of the notable success stories of the UAE. The UAE firmly believes that progress on issues relating to women’s rights is essential for building a tolerant and modern society.
Since the very foundation of the United Arab Emirates on December 2, 1971, women have been recognised as equal partners in national development by the UAE’s leaders, and the Government continues to pursue a strategy of empowering women in all fields. The UAE’s society has comfortably accepted this approach, in a way that has made women real partners and drivers in the country’s ongoing development process.
The UAE Government has successfully delivered on this objective by offering women education, employment, and training opportunities, and by introducing forward-thinking and progressive laws and legislation that have paved the way for women’s empowerment.
The Constitution of the UAE guarantees equal rights for both men and women. Under the Constitution, women enjoy the same legal status, claim to titles, access to education, the right to practice professions, and the right to inherit property. Women are also guaranteed the same access to employment, health and family welfare facilities.
Furthermore, the UAE has enacted a range of legislation and laws that provide legal protection for women, and punish anyone who might compromise their dignity or personal safety. In this context, The UAE has signed all international treaties on protecting the rights of women. Among these are the Convention on the Elimination of All Forms of Discrimination against Women, CEDAW, (2004), the Hours of Work (Industry) Convention (1982), and the Equal Remuneration Convention (1996).
Furthermore, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai has also been at the forefront of encouraging women’s empowerment in the UAE. For instance, during the Government Summit in Dubai in 2015, His Highness Sheikh Mohammed announced the formation of the "Emirates Council for Gender Balance" which aims to bridge the gender gap and boost the UAE’s efforts to evolve and enhance women’s role as key partners in building the future of the nation.
While in March 2015, Her Highness Sheikha Fatima Bint Mubarak, Chairwoman of the General Women's Union, Supreme Chairwoman of the Family Development Foundation and President of the Supreme Council for Motherhood and Childhood, launched the National Strategy for Empowerment of Emirati Women in the UAE 2015-2021, which provided a guiding framework and reference for all federal and local governmental institutions and civil society organisations in developing plans and work programs to empower women in all areas.
UAE Women in progress The UAE is a recognised leader in terms of gender equality in the region. This achievement comes from the fundamental belief that women and men are equal partners in society. Through a series of public and private sector initiatives, women are playing an increasingly stronger role in all facets of Emirati society.
In conclusion, Emirati women, who account for 49.3 percent of the national population, are today at the cutting edge and forefront of UAE economic, political, and social life. Aided by the government’s unwavering commitment to empowering women and providing equal opportunities, the status of women within the UAE has flourished in parallel with the country’s growth since the federation was established in 1971. It is evident, that this process will only continue apace, and women will remain an ever-important cornerstone for not only the UAE’s present, but also its future.
What do you predict the next few years will look like for UAE and how will this affect investment and international growth?
Today, the UAE is a major international tourist and business centre as well as one of the most modern, stable and safest countries in the world.
It has one of the highest per capita incomes in the world at nearly $25,000 USD. The UAE has approximately 10% of the world's total known oil reserves, 90% in Abu Dhabi and about 10% in Dubai. While the Abu Dhabi reserves are expected to last another 100 years, at present rates of production Dubai's reserves will last only another ten years.
The government has issued new rules and regulations to further improve the business environment. The industrial sector, which contributes 14% to GDP, is forecast to expand and contribute 20% in 2021. Big growth will come from non-traditional industries and the knowledge-based economy.
The UAE seeks to attract more than $70 billion in industrial investments by 2025, which will help increase the share of the industrial sector in the GDP to 25%.
Open economic policies helped enhance the UAE's attractiveness to foreign direct investment (FDI). The Ministry of Economy announced in 2016 that it aims to increase the contribution of FDI to 5% of the country's gross domestic product over the next five years. This is in line with the goals of the National Agenda of the UAE Vision 2021.
The country has always believed that the long-term demand for oil outstripped supply, and that for companies with strong balance sheets and a long-term view, now was the time to invest, not to withdraw.
In 2016, the UAE government launched a six-pillar plan, which was set up in collaboration with the World Economic Forum (WEF) and seeks to transform the Fourth Industrial Revolution into a global movement spearheaded by the UAE.
First pillar: The UAE government will establish the Fourth Industrial Revolution Council, the first of its kind in the world. The council will report directly to the cabinet and will be supervised by the Ministry of Cabinet Affairs and the Future. Council members will include representatives from government, private sector and academic organisations.
Second pillar: Working closely with the WEF and through the Global Future Councils to formulate a global governance framework that regulates legislative and executive efforts to implement Fourth Industrial Revolution technologies.
Third pillar: In collaboration with the WEF, the UAE government will work to establish Fourth Industrial Revolution Councils, which aim to provide advisory support to decision makers.
Fourth pillar: Launching a programme that seeks to include governments from around the region in the network of experts that take part in the Global Future Councils and, consequently, enhancing the event's role in supporting economic development in those economies. The network includes more than 5,000 members and experts from governments, international organisations, private companies and academic research institutions.
Fifth pillar: The UAE will be the first country in the world to experiment with and implement the technologies of the Fourth Industrial Revolution. This builds on the steps the government has already implemented through initiatives promoting technologies such as blockchain, smart transportation, 3D printing and artificial intelligence.
Sixth pillar: The UAE government will be the first in the world to design and build a framework within its national agenda that aims to prepare governments for the future. The framework focuses on measuring the readiness of governments in the next 10 years against six main criteria: technology and innovation, economy, society, natural resources and the environment, security and governance.
Leaving no stone unturned in pursuit of comprehensive and sustainable economic development, the UAE is now looking at innovation to be the next economic breakthrough.
Drafting contracts is an important step for any corporation; a good contract will contribute towards avoiding litigation action and ensures the client and its company is safe in a variety of potential situations. This month we speak with Barend Kellerman, who states anticipating the pitfalls when drafting contracts is much more satisfying than any other aspect of law. He speaks with Lawyer Monthly about commercial litigation, the development of South Africa, as well as touching on another area to which he is an expert in: sports law and how athletes should handle doping offences.
What do you think is the best way in which doping offences should be handled when involving influential athletes, especially during anticipated events such as the Olympics? What do you think should be the first course of action for clients and lawyers to take?
It depends on whether the athlete has been provisionally suspended from participation (which may be the case if the substance involved is a so-called specified substance such as a stimulant) or not and, furthermore, how long before the event the positive test becomes known.
Even if the athlete has not been provisionally suspended, his/her participation in the event may be in jeopardy because the national organisation may refuse to select the athlete whilst he/she is under investigation.
Where the athlete has been suspended from participation or where he/she faces omission from selection, and where it is possible to conclude the hearing prior to the event or selection for the event, it may be sensible to do so as soon as possible. It would be sensible to do so where there is any prospect that the athlete may prove that he ingested a specified substance inadvertently and the possible sanction may only be a warning or a very limited period of ineligibility, which may expire prior to the event. These instances are in the minority, as the sanctions for even inadvertent ingestion are harsh.
Where the athlete has not been provisionally suspended and where he/she is still eligible for selection despite the positive test (or the adverse analytical finding, as it is referred to in the anti-doping rules), the athlete should wait for the hearing to be concluded after the event. It is still likely that the period of ineligibility that is ultimately imposed may affect the results attained in the event.
The reality is that it is very unlikely that an athlete whose blood or urine sample returns an adverse analytical finding shortly before an event, will be able to compete in that event.
In all doping cases, athletes and their counsel should consider the following questions before deciding on a course of action:
When drafting contracts, what are your main priorities? How do you ensure you do what is best for your client, whilst still adhering to the law?
When drafting a contract for a client, you usually represent one of the parties to the agreement. You need to ensure that, if a dispute should arise and your client should ever need to enforce his rights in court or through arbitration, he would be able to do so by relying solely on the wording of the contract. There should be as little room as possible for a factual dispute.
The contract should unequivocally, with as little reference as possible to factual matrix wherein the agreement came into being, record the parties' rights and responsibilities.
To do so, one needs to form a proper understanding of your client's business, of the industry that he operates in, of his aims with concluding the agreement and of the possible pitfalls in executing the transaction.
You also need to be able to advise your client on the legislative framework within which the transaction will take place and of the possible unforeseen and necessary consequences arising therefrom, such as tax liabilities, the need for certification or accreditation and, in a South African context, the need to comply with broad-based black economic empowerment legislation.
Because the contract will potentially be enforced in court and because common law or statutory illegality may result in the unenforceability of the contract, I would venture to say that it would always be in the client's best interests to remain well within the bounds of legality.
How has commercial law changed over the years in South Africa?
Our commercial environment has become much more regulated (some say completely over-regulated, to the detriment of economic growth) over the past 20 years. Legislation such as the Consumer Protection Act, the National Credit Act, the new Companies Act, broad-based black economic empowerment legislation and other social justice legislation have changed the commercial legal landscape significantly.
There has been a multitude of changes that drafters of contracts have had to keep up with. Our case law is still developing on the legislation in many respects and there remains some uncertainty, which will result in litigation.
Apart from the influence that the legislation has had on the substance of agreements, it has also resulted in a move away from technical legal jargon, in favour of simpler and more accessible language.
The party negotiating from a "weaker" position, such as the consumer of goods or services, or the recipient of credit, has found much aid from the legislature and from the courts who interpret the legislation. In most instances, it is impossible for the "stronger" contracting party (such as credit providers, providers of goods and services, landlords or employers) to contract out of the legislative provisions.
What further changes are you hoping to see that will benefit economic growth in the jurisdiction?
In the South African context, less regulation will stimulate an increase in small businesses. Small business is the major provider of employment and the driver of economic growth. Government has long been called upon to make it easier for small businesses to develop and grow. These calls have not been heeded.
It is simply not being made attractive enough for entrepreneurs to start new businesses and to employ people.
The other concern for business is that there is little supply of skilled labour, even against the backdrop of our massive unemployment. Government should focus on skills development and be less concerned with the redistribution of existing wealth, which contributes nothing to economic growth.
How have political tensions affected business and commercial ventures in South Africa? What can be done to ensure this does not cause any detriment?
The internal power struggle in the governing party and its contempt for market sentiment have greatly undermined investor confidence. The degree to which the actions of some members of the ruling party have damaged the economy, have led some to believe that its policy of radical economic transformation may entail the destruction of the economy in order to establish structural changes thereto, similar to what was attempted in Venezuela. Whilst the government is doing its utmost to achieve this, South Arica's financial sector and business structures remain sound and business grinds on in the short term. In the long-run, the only hope for growth in the country's economy remains a peaceful change in leadership in the ruling party, or a change in the party that rules, through democratic means. Civil society must remain vocal about its concerns over the direction that government is taking and the degree to which corruption and sycophancy have become embedded in all levels of government and society.
If you had the power to, what changes to constitutional law would you make in order to make your role easier?
I would like to see amendments that facilitate a movement away from a party-representational system to one where individuals are elected and held accountable by the electorate. It would also be in the interest of our democracy to allow for secret ballots in parliament as opposed to the current system wherein representatives are simply required to toe the party line, on all issues. This will allow them to vote in accordance with their conscience and their constituency's interests, rather than self-interests.
As Thought Leader, can you share the leadership skills you gained throughout your years when acting in the High Court?
Litigation is a quagmire of moral and ethical dilemmas. One requires a strong moral compass to navigate this landscape. Principles should never yield to tactical gains or commercial benefits, whether for yourself or your client. You require strong and good judgment under pressure.
Within these strict moral and ethical boundaries, however, an attorney should pursue justice for his client with vigour and without regard for his own interests. An attorney should not allow the pursuit of his/her client's cause to become jaded by the many procedural obstacles and practical challenges that line the road. Ultimately, the adage remains true: the wheels of justice turn slowly, but grind finely.
You specialise in many areas of law, which is your favourite specialism and why?
The drafting of agreements provides me with the most satisfaction. I prefer anticipating the pitfalls rather than helping people out of them.
Mini Questionnaire – ‘Food for Thought’:
What do you feel you couldn’t live without?
Professionally, I am unable to do without a good personal assistant and a competent bookkeeper. Being able to delegate filing, accounting and other administrative matters allow me to focus my efforts on the substance of my work, confident in the knowledge that the rest of the work is being taken care of.
It is impossible to maintain the service-level standards that you set for yourself without excellent support staff. My biggest asset is the people that I surround myself with, insuring excellence throughout the firm, instead of pockets of excellence.
What has been your biggest achievement in the past 12 months?
Managing to find a balance between my family life and clocking up hours at the office.
Do you have a mantra or motto you live by when it comes to helping your clients?
Under-promising and over-delivering.
