Understand Your Rights. Solve Your Legal Problems
Describing the pharma industry as ‘a maze’ of regulation, here Kornelia Nagy Koppany, Managing Partner at KNP Law, a Hungarian law firm, talks LM through the structure and challenges faced in the Hungarian life sciences segment, remarks on the potential legal changes that would be welcomed by the firm, and briefs us on the complexities involved in distribution agreements, privately and with government bodies both on a domestic and international basis.
You work predominantly in advising on negotiations, agreements and M&A; how complex can these scenarios become in the Hungarian and European life sciences sector?
Our primary objective is to assure perfect compliance with Hungarian laws. EU and US pharmaceutical laws have different approaches and most of our pharma and life sciences companies are multinationals headquartered in the UK, Switzerland and the US. Parent companies have Master Agreements, which have to be adapted to local jurisdiction, but the trick is to follow the approaches of the parent companies and bigger markets and comply with local laws.
The pharma/life sciences sector is highly regulated; international, regional and local rules apply. These rules are mostly mandatory, and there is no room for individual solutions and interpretations. In addition, Hungary has a strict and (over)regulated legal environment. It is a relatively small market, and innovations coming from a small market are not always welcome. Templates and models already implemented and working elsewhere are expected to be followed in Hungary, which is not always the case.
What key risks do pharma businesses have to consider in distribution agreements? How do you help in this matter?
Distribution agreements must comply with competition law provisions, both EU and national, and it requires a separate set of thorough analyses. Another issue is the limited number of market participants with national coverage. For new ventures, entering the market is not easy and requires substantial capital investment. Solvency of small distributors is always a risk, which needs to be limited to the highest possible extent.
Exclusivity is another issue. Distributors prefer exclusivity when pharma companies need more market coverage, and leverage and compliance with competition laws.
Payment delays are the norm and payments from government bodies, including the Sick Fund and hospitals, are always late. When we draft distribution agreements we try to incorporate as many guarantees as possible to protect the interest of our clients, which include receiving payments on time.
What complexities arise in pharma agreements when government bodies are involved?
Government approved pharma budgets are always limited, and the need for medicinal products (including new, innovative products) always exceeds the appropriated central budget.
Pharma companies are rarely ‘equal’ with government bodies, they are not treated as equal parties, but pure suppliers. Pharma companies want to introduce new innovative products, and their largest consumer is the government, especially when it is about inclusion into the social reimbursement system. A recurring problem is that there is no room for effective legal challenge or successful litigation when the outcome is unfavourable to the manufacturer/distributor.
Another issue in Hungary is the constant reorganization of the health administrative organization, which includes regular personal changes, and overall results in dealing with a “faceless” organization.
As a leader in this niche, what have you found to be the biggest legislative impediment to progress in the life sciences sector over the past few years?
Legal provisions can be ambiguous and not well structured, while changes, other than they will certainly happen, are unpredictable. Government bodies have broad interpretation of legal provisions and set compliance requests that are stricter than the prevailing legal provisions. Public procurement laws are also subject to regular modifications, but in favour of the manufacturers and distributors. It would be nice to see at least an interaction between the market and the law, and regulators willing to listen to the market players.
As a thought leader, if you could incite legislative developments or change the law to facilitate your work in Hungary, what would you change?
Simplification in general would be welcomed. In Hungary specifically: clarify and provide consistent product promotion rules; simplify admission of new products into the social reimbursement system; avoid last minute changes that may affect the operation and budget of pharma manufacturers and distributors; set the national pharma budget in an amount that would meet the steadily increasing needs of an aging population; apply consistently public procurement rules; and set deadlines that the authorities must comply with.
How do you believe your past experiences help you as a thought leader in today’s life sciences industry?
You can compare pharma regulations to a maze. You know where to enter but you may never know where to find the exit. Our role is to understand the objective of our clients and assist them in many ways, including alternative solutions if plan A fails. It requires perseverance, and impeccable knowledge of all the regulations that apply and the government bodies we deal with.
Sight is a precious gift, so surgery in such a delicate area can cause apprehension; when these cases go wrong, or not as expected, the patient may decide to take matters to court. Jane Olver has extensive, specialised experience behind cosmetic eye surgery and speaks to us on how she helps when things go wrong.
What are the most common cases you deal with in cosmetic eye surgery instructions?
I most often see clients who are dissatisfied with their cosmetic eyelid surgery, either because it had not met their expectations, or had left them with a noticeable disfigurement such as visible scar, asymmetry, eyelid or canthal contour change.
Very often the client will tell me that they went to see their surgeon for one particular problem and they were “talked into” having some surgery they did not go to see their surgeon for; when that surgery then goes wrong, or does not give them the expected result they become unhappy. When they express that unhappiness to their surgeon, this often leads to a breakdown of the professional relation, as the surgeon cannot always see what their patient sees. What the patient really wants is for the surgeon to say is “I made a mistake”, or “Would you like to ask someone else to see you?”. They want their surgeon to know that they did a bad surgery, below the standard they would have reasonably expected from a competent surgeon of similar grade. As that often does not happen and the surgeon effectively rejects them, they decide to bring a legal claim for negligence.
Avoidable complications of eyelid surgery:
A proper way to avoid the above is for the surgeon to have first done a thorough pre-operative assessment, with measurements of the eyelids and their function, with examining for eyelid laxity, for dry eye. They should ask to see pictures of the patient when they were younger, and identify the patients’ expectations, only offering surgery which is both within those expectations and also within the skills of the surgeon.
In cases of professional negligence, how long can it commonly take to complete an investigation in the field of ophthalmology?
It usually takes about 12 to 18 months. Once I have done the claimants consultation assessment then the report is usually prepared within four to six weeks. After that it is up to the solicitors and the courts. I may be asked to provide a supplementary report if there are queries or new material provided, and to do a joint conference with the other expert.
At the assessment, I will make photographic documentation, measure visual fields, examine osmolarity of the tears for dryness, the eye pressure and examine the eyelids and eyes on the biomicroscope called the slit lamp. This allows me to put in fluorescein eye drops and see if there are surface problems related to the cosmetic eyelid surgery, or an existing pathology which should have been detected by the surgeon before the surgery and could have enabled them to advice their patient differently or tailor their surgery appropriately. This is where being an ophthalmologist is so important as it helps examine the eyelids and eyes, remembering that the function of the eyelids are not just to look beautiful, but also primarily to protect the eye through proper blinking and closing.
How difficult is it to produce a thorough analysis of a claim, and does this often depend on the patient/claimant? Are there many variables?
For a medical expert, the main thing about a potential claim is thoroughly reading the instructions and if possible examining the claimant in order to provide an independent medical opinion. One important variable is the condition of the medical material presented to me: if it is well indexed and paginated then my job is made much easier. If it is presented digitally it is easier to scan through. Often though I will request both digital and paper versions.
As an expert witness in eye surgery, to what extent do you get to engage the full capacity of your expertise?
Fully. With 20 years as a consultant and over ten years training prior to that, and still being in mainstream practice, I am able to draw on my considerable expertise and knowledge in order to be a medical expert. I think having the maturity and reputation helps me provide a sound and considered opinion.
How often is your critical analysis the game-changer in a claim, and what are the consequences for surgeons found to be liable for further eye problems?
This is a very difficult area. In such a small field as eye surgery I am likely to know most of the surgeons, either by name, or have worked with them professionally. In Oculoplastics I will know most of the British Oculoplastic Surgery Society (BOPSS) members. Therefore, I have to declare any potential conflict of interest and I do identify the capacity in which I know the surgeon. Many plastic and maxillofacial and even otolaryngology and head and neck surgeons often carry out eyelid surgery as it is within their training curriculum, but they may not always have the vast experience of an oculoplastic surgeon who only operates on eyelids, and may not have kept as up to date, so many of the claims I see are against surgeons who do not habitually carry out a large number of said surgeries.
Sometimes I may find that the claimant does not have a legitimate claim and that there has not been a breach of duty, and I must say so. My report is for the court and is impartial.
Professionally, I may find that one of my colleagues has made a breach of duty and I have to remain impartially critical, based on the facts having examined the claimant, read the clinical notes and done the literature search. It is not for me to predict what the outcome of the case will be, only to provide my opinion within the framework of my specialist field. I think most surgeons are professionally mature enough to realise that a medical expert is reporting on their observations and it is not a personal criticism of them.
What do you believe would be warmly welcomed by UK ophthalmologists in terms of legal reform in medicine and in your specialist areas?
I do think that UK ophthalmologists must be more transparent about how often we do various surgeries and our complication rates. This will help patients understand that there is no such thing as 100% successful surgery and that they can expect possible scarring, asymmetries, tear flow problems. This may reduce the number of claims, as realistic expectations are paramount. It can be through our yearly appraisal but there should also be an obligation through Care Quality Commission for private practice cosmetic surgery to be properly recorded, inspected and published.
Continued training and evidence of continued learning is also essential.
Currently, higher surgical training includes very little cosmetic surgery so the work being done between the Cosmetic Surgery Interspecialty Committee, the GMC and the Royal Colleges is paramount to laying the foundation for training and producing competent future cosmetic surgeons.
To ensure that solicitors are serving their clients well, solicitors need to attend to specific regulations and when these are not met, the Solicitors Regulation Authority (SRA) can intervene. Here at LM, we speak to Jonathan Goodwin who has extensive experience in prosecuting misconduct cases, however, up until recently, Jonathan has decided to turn his attention towards defending those under investigation. He informs us on the transition of defending solicitors on the SRA Panel, the challenges when defending those in the legal sector themselves and how his unique experience allows him to gain the best result for his client.
How did you manage with the transition of being a prosecutor for over 20 years, to now defending the solicitors under investigation? How did this alter the way in which you deal with cases?
The transition from becoming a prosecutor and now being available exclusively to defend solicitors in relation to complaints, investigations and disciplinary hearings before the Solicitors Disciplinary Tribunal (SDT) has been entirely straightforward.
I apply the same level of scrutiny and tenacity to clients I am defending in exactly the same way as when I prosecuted in terms of analysing the evidence, looking for the weaknesses in the prosecution case and achieving the best possible result.
What are common cases the SRA are faced with and as a defender, what challenges do they pose? How were these challenges different to when you are a prosecutor?
The variety of cases investigated by the SRA is wide and varied and can range from breaches to the Solicitors’ Accounts Rules, money laundering allegations, breach of undertaking and many more. Dishonesty often features in allegations raised by the SRA. There is a specific test that the SDT needs to apply in determining an allegation of dishonesty and it is important that expert advice is obtained by anyone facing such an allegation.
Having acted for professional bodies and individuals, how different are their cases and what do you do differently to deal with their cases accordingly?
The biggest difference between acting for a regulator and an individual is equality of arms and resources. A regulator has the resources to pursue a case and instruct the highest level of advocate if they so wish. Such luxury is often unavailable to an individual who has to fund the case personally. An individual will be concerned, stressed and anxious about the possible outcome, with the very real risk that the career which they have developed over many years could be abruptly brought to an end. With my unique level of insight and experience, I am in a position to guide, assist and represent solicitors through what can be a very traumatic process and achieve the best possible outcome for my client.
What is the most difficult aspect when defending solicitors? As the defendants are in the legal profession themselves, are there many disagreements during the case; if so, how do you deal with this?
One of the most difficult aspects when defending a solicitor is to persuade the SRA that the case lacks merit. As you say, given the respondent is a solicitor it can, on occasion, be a challenge to persuade my client that the advice and approach which I have recommended is the right way forward. However, that said, my experience generally is that solicitors recognise the need to turn to someone with the required expertise and experience relating to regulatory and professional discipline law and will be open and receptive to advice and the careful management of expectations.
What was the most appealing aspect of switching from a prosecutor for the SRA, to a defender for those they investigate?
My passion and drive is achieving the best possible outcome for my client, whether that be by persuasive written representations to the SRA that result in no further action, or a successful outcome following a hearing before the SDT. To help an individual save their career, practice and livelihood with the ability to continue to support their families is particularly rewarding. I achieve great satisfaction from helping solicitors protect their right to practice against the might of the regulator. My unique insight and unrivalled experience gives me the ability to do so.
Longing to learn and experience new things every day is part of what makes us human, and our next guest has always thrived in the progress and development of his skills and knowledge, to the future-looking benefit of human well-being.
Mr. Liguo Zhang is the chief partner of GrandwayLaw Offices and a well-known legal expert in the field of China’s securities and capital markets. Here Mr. Zhang talks with Lawyer Monthly about his legal upbringing, the segments and people that shaped him, and the steps that led him to hold the reputation he holds today in China.
What led you to embark on a career in the legal profession? What draws you to your specialist areas of M&A and financial transactions?
In the early 1990s, the trend of Chinese economic reform, development and international communication revealed a growing demand for high-level, professional and international legal services. Meanwhile, it took seven years of legal study experience at Peking University and several years of in-house experience, working in the central enterprise especially assigned to the US law firm, for the elite lawyers’ ways of working, professionalism and social influence to have made me comprehend it, recognize it and more importantly, long for it. At that time, all these strengthened my confidence to engage in a legal career, so I quit the secured job and dedicated myself to a life as a lawyer.
By some coincidence, I had the opportunity to participate in financing transactions and M&A when I’d just began practicing as a lawyer. In the process of providing legal services, I have obtained a better understanding of the relevant industries, enterprises, teams and managements. Furthermore, gaining legal knowledge surrounding the companies, securities, land, taxation, environmental protection and intellectual property etc. called for professional research into the constantly changing, and at times even disordered, regulations and law environment. This period also involved providing personalized resolutions and plans for specific enterprises’ historical evolutions, property rights form and corporate culture via the research mentioned above. Though the stress and the challenges of the whole process were extremely tough and made me over-reach myself, the achievement of clients, their sense of triumph, and high praises of our work made me believe that all the hardships were worthwhile. It is a fortunate and honorable feat to be a securities lawyer, and to create greater economic and social value for enterprises through the capital market with the professional knowledge and vast experience.
Within these segments, is there a particular legal sub-category you are more passionate about? Please explain.
During the course engaged in the relevant legal services, I felt more passionate about the Business of IPO, for the reasons that these businesses are more challenging and of greater significance because of the development of corporates in the Chinese legal environment, and especially for the higher requirements of the intermediaries’ knowledge and experience, and greater difficulty and strength in completing the work.
If you never chose to be a lawyer, what other profession might you have pursued and why?
For the possibility that I had not chosen to be a lawyer, I would have chosen to engage in private equity investment, because I love to know and study different kinds of industries, enterprises, entrepreneurs and management teams. I also mostly enjoy helping and supporting the aspiring enterprises to better develop, in order to better serve human well-being.
In retrospect, if you could return to a highlighted moment of your legal career, what time would you chose and why?
If I had the fortune to experience a time in my legal career once again, I would choose the time when I was involved in a whole IPO process, starting with the due diligence, analyzing all the legal issues we found during the process, participating in the plan making, drafting relevant documents, taking part in the deliberation of shareholders meeting, till the declaration of full set of materials. At the time, I committed myself not only to the development and accomplishment of the project with high effectiveness, but I also established profound friendships with the entrepreneurs and intermediaries. More importantly, I enjoyed the concentration and quiet state of mind with active thinking and creativity.
What would you say have been the most valuable legal experiences or cases that have brought you to where you are today?
My most valuable experience of securities law originates in the participation of hundreds of restructurings and establishments of enterprises’ IPOs, and the businesses of public companies’ acquisition and reorganization. The most fortunate achievement has been proposing practicable resolutions for extremely complicated and difficult corporate issues, providing ways of access to and utilization of the capital market with prospective and constructive legal opinions.
How did being the becoming one of the most influential Chinese lawyers in the top 10 impact your legal career? What do you think got you such a prestige recognition?
With 30-years securities working experience, the law firm, the team and myself have grown up with the Chinese capital market. It is an honor to see the professional attitude and quality of work, the dedication of lawyers we served in the process of providing the legal service, and the supervision departments, clients and peer law firms’ highly praised.
What motivated you to be the first to practice securities law in China and how did you undergo the process?
Due to some coincidences, and the system ®ulations for securities lawyers, the firm I worked for was one of the first law firms qualified to practice securities law. I was also one of the first group lawyers who were qualified to practice securities law. The Chinese capital market has just started its development at that time and there was tremendous demand for legal services in the capital market. As someone who just finished working abroad for a US law firm and came back to China, this was quite fascinating for me. Therefore, I devoted myself to the area of securities law, and no matter how the capital market changed, I have always focused on providing high quality legal services and improving the professional skills of the associates in my law firm and myself.
When giving speeches at Peking University Law School, how does it feel to be paving the way for the future lawyers? What key advice do you have for them?
My legal dream sailed from Peking University, so every time I go back to give a speech at the Law School of Peking University, I would feel a lot of gratitude, warmth and desire to assist or share my understanding of a career as a lawyer, and how to become a good lawyer, especially a non-litigating lawyer, with the students who want to be a lawyer in the future, so that I can do my part to improve the transparency, publicity and fairness of the Chinese capital market.
My suggestions for them are:
(1) being a student, they should focus on study, not only in the legal area, but also in philosophy, literature, arts, and English, to improve themselves to be international and professional;
(2) participate in social activities appropriately, no matter on campus or off campus to improve intellectual or social skills;
(3) choose a career in accordance with the ideals and qualities of themselves. The best career option would be something combined with fitness and interest;
(4) it is critical for an excellent lawyer to be focused, professional and honest.
Do you have further future goals? Are there avenues you still wish to explore in the global legal sphere?
My vision for the future is as follows:
(1) recruit more capable personnel through campus recruitment or other approaches to make Grandway more energetic, creative and accumulative;
(2) advance the all-sided reform within Grandway, not just improve the system, but expand the areas of our practice to make Grandway a more sustainable, comprehensive, international and competitive law firm. Additionally, foster more specialists in our practice areas;
(3) under the influence of globalization, especially with the Internet and artificial intelligence, I hope to figure out a way to combine technology with the legal services in the capital market to free our professional lawyers from some repeating and miscellaneous matters and provide our clients with higher quality.
With career experience of over three decades and an exposure to the capital market for over two decades, I have witnessed the development of the Chinese capital market and participated in a number of land-marking and ground-braking cases; some even managed to bring the company back to life. There are a lot of tastes, which are valuable for me. It’s really hard to choose one.
What are your objectives in 2017?
1) to properly expand Grandway's scale (including crews and branches) and improve the diversification of Grandway's business;
2) to further reform Grandway's system, enhance Grandway's creativity, inheritance and accumulation;
3) to reinforce the cooperation with advanced techniques intermediaries, promote the integration of Grandway’s professional legal services with Internet and artificial intelligence, and strive to obtain preferable performance.
What are the parts in your life that you will always persist firmly?
Ideal, belief, dignity and happiness.
How do you measure your success?
Success is much more like a state of mind or a feeling within. It is a treasure to maintain inner peace.
Meanwhile, it also brings me a lot joy to know that my existence and endeavors makes my families, friends and colleagues dignified and happier.
Furthermore, I enjoy the happiness, recognition and dignity brought with my commitment, knowing that my career is in accordance with my ideals and beliefs.
As the legal world is more global than ever today, immigration in the business world is an integral and essential part of strategic planning for international businesses, entrepreneurs and private clients. Talking about how to utilize the tool of immigration in meeting the needs of global citizens is Linda Lau, Principal of Global Law Group, a US law firm.
How have immigration policies shifted in America?
The design of the immigration system was enforcement oriented, focusing on deporting status violators. There has not been much discussion as to the challenges involved by inheriting a broken US immigration system. Recognising the problem, the legacy Immigration and Naturalization of Services (INS) was restructured, splitting into three different service components: U.S. Citizenship and Immigration Services (USCIS), focusing on immigration benefits; Customs and Border Patrol (CBP), focusing on border inspections and Immigration, and Customs Enforcement (ICE), enforcing against immigration violations. The intent is that the global business community could navigate through the US immigration system with more business-friendly policies.
The US immigration policies has made noticeable efforts to accommodate the demands of the global business community as many investments now involve non-US owned real estate projects mushroomed in US cities. This is evidenced by the rise in applications of immigrant investors, international managers and aliens of extraordinary abilities in business or other fields.
What is the biggest and most prominent challenge businesses face when trying to obtain a visa and residency in the US? What would you recommend to overcome this challenge?
The biggest challenge is to change the mindset of clients by asking them to incorporate the needs of any related party and each family member. This way, we can join hands to navigate the various visa options as many considerations are involved in terms of visa types for different members of the businesses and each family member. This may include international managers, treaty investors, H1B specialty workers, students and interns, etc. Take the time to get appropriate referrals for proper counsel. Once I had a client who came to see me and told me I was the 26th lawyer consulted before retaining any counsel, I was glad she did not look for the 27th lawyer for further consultation.
What is the reason for successful execution of a project in US with immigrant investor funding?
Even though the EB5 Immigrant Investor program has been available since the 90’s, most of the projects have utilized EB5 funds from investors to finance their projects during the last 6 to 8 years.
Some of the projects I have structured resulted in better execution than others due to careful planning and the willingness to engage highly skilled professionals in the legal design phrase.
What developments are you hoping to see for immigration law to progress? Is there anything you would change if you could?
I would like to see an immigration system that has separate management and processing for cases involving investments, businesses, creative talents and professionals apart from other benefits so USCIS can be true advocates for these applicants.
Thus, trained adjudicators can stay focused in facilitating immigration benefits for economic growth. An example in illustrating this point would be that under the US immigrant investor program, creation of 10 jobs is required for each investor, whereas other countries understand that once there is infusion of foreign capitals into their economy, jobs will be created. If the US law and policymakers would be convinced of the same concept, unnecessary delay and erroneous adjudications could be avoided without the necessity to do an elaborate job count analysis.
Is there any form of common misconceptions on the knowledge of the US immigration policy which causes frequent (somewhat unnecessary) difficulty for your role?
The misconception that one size fits all is prevalent among clients. The US immigration application is a customized process. The actual application form is only 10% of the entire package with the remaining 90% being prepared according to the actual facts of the case. This is the reason that clients should be proactive and engaged in the process.
As a Thought Leader, how do you have to adapt the way you approach cases when dealing with multi-million dollar investors, in comparison to individuals or small businesses?
I consider all clients the same as each came to me for a check-up like seeing a doctor. I analyze the facts and provide a diagnosis and treatment plan. Thus, thorough understanding of the background and history of each client including projects is a must.
Can you talk to LM about a specific case you have dealt with in the past, to which you applied particular thought leadership?
There is always a child’s face behind a visa, as 9 out of 10 cases have families where there are children involved. When the dad must split time between his home country and the US to engage in his business activities, the children and their mother would be in the US so the children could pursue their education. I would explain to the parents the price the children have to pay in life when the family is separated in the pursuit of “happiness” and “prosperity”. Family culture and spirituality are core to sustained economic interests of private client families from generation to generation.
Having established one of the first ever commercial law firms in Croatia, Marijan Hanzekovic, Founder & Managing Partner of Law Firm Hanžeković & Partners Ltd., believes education and improvement are paramount to the successful development of law practitioners, and here details his thought leadership in the progress of hundreds of young professionals in the Croatian litigation arena. Marijan also discusses the challenges the firm faces, its accomplishments in the dispute resolution field, and touches on the need for deregulation, in particular regards to the Croatian Civil Procedure Act.
Have there been any recent regulatory developments to affect your work in Croatia? If so, please tell me about them.
The main developments I would single out are the amendments to the Croatian Income Tax Act. They introduced significant changes, amongst others, capital gains became subject to the income tax rate of 12%, plus city surtax, if applicable.
Tax on capital income is withheld at the source without the individual being entitled to claim expenses or personal allowances. An obligation to submit an annual personal income tax return does not arise. Therefore, it can be considered that constant changes in the tax system do not encourage a favourable entrepreneurial climate and investments in the domestic economy.
As a thought leader, are there particular procedures you would change to facilitate your work?
I believe that deregulation is extremely important. The Croatian Civil Procedure Act constantly reduces the rights of parties involved in the procedure. Also, there are too many municipal courts whose practice is not uniform.
Furthermore, the Supreme Court of the Republic of Croatia is not sufficiently efficient. The Supreme Court should be more active in areas such as discussing current issues regarding court practice, ensuring the uniform application of laws and declaring regular or extraordinary legal remedies if required by the law or separate by-laws.
As I see it, there is no reason for the practice of municipal courts to be different if there is a regulatory mechanism, and there is also no reason for the Supreme Court not to take a stand on important questions.
What is the biggest challenge you face as an Arbiter?
As an Arbiter at the Permanent Court of Arbitration of the Chamber of Commerce of Slovenia, of the European Court of Arbitration in Strasbourg and the International Chamber of Commerce in Paris I have participated in numerous arbitration proceedings.
Arbitration was intended to be an alternative to litigation in order to provide contracting parties with a more efficient and commercially fair system, however, I believe that it has not yet been accomplished.
In my experience, there is general dissatisfaction relating to the cost and inefficiency of arbitration and the significant lack of relevant case law.
What is the biggest difficulty you face when offering legal assistance to foreign enterprises?
When dealing with foreign clients it is always a challenge to introduce them to the intricacies of the national legal system and its regulations, especially when clients come from common law countries. A lot of work has to be invested in explaining national legislation and the differences between the systems, in order for the client to adapt its agreements and behaviour accordingly.
Your firm has participated in some of the largest and most significant transactions in Croatia. What were these transactions and what difficulties did they pose? How did you overcome that?
Our firm has participated in the biggest infrastructure project in Croatia, namely the granting of the concession for the construction and operation of the new passenger terminal of the Zagreb Airport. The firm has had a significant track record in infrastructural projects since 1995, when the Croatian Government granted the first motorway concession i.e. for the Istrian Y.
As the representative of the concession grantor we were engaged in the preparation of the tender documentation and concession agreement, as well as the negotiation of the direct agreement and the financial package.
Since the transaction took place immediately before the Croatian accession to the EU, we faced difficulties in adjusting the Croatian legislation to EU legislation and the practice of the European Court.
The difficulties were overcome through permanent cooperation of all the ministries and other competent authorities in the Croatia.
Our firm has also participated in the two most significant transactions in the banking sector. We represented BANKA INTESA in the acquisition of the 2nd largest bank on the Croatian market as well as ZAGREBAČKA BANKA d.d., the 1st bank on the market, when UniCredit Bank successfully entered the market. These transactions were challenging, as at that time Croatia had very restrictive foreign exchange legislation i.e. Croatian citizens could not deposit funds abroad nor acquire foreign shares.
What is the most rewarding aspect of your role?
I have always strived to provide the best possible services with a team of individuals with the best expertise, while ensuring a healthy work environment and fostering any and all further education and specialization of my employees.
I have never taken legal representation and the provision of legal services lightly and have always strived to provide my clients with full and comprehensive services.
In the end, one's success is measured by client satisfaction, whether it is a big or a small client, a natural person or a big corporation. I believe I have given my best in this regard, which I further believe has been recognized by my clients, whose trust I have enjoyed for many years.
What was the biggest challenge when assisting with preparation in the introduction of free legal aid and the biggest reward?
I was a member of the Assembly Working Committee when the Croatian legal aid act was passed in 2008. At the time, it was challenging to settle differences between NGOs and law firms/lawyers providing legal aid. A compromise was reached at the point that free legal aid can be offered by registered NGOs that employ qualified legal professionals. I believe that everybody is entitled to have access to quality legal assistance in any circumstances. Legal aid is a fundamental right of all people hence it is necessary that the state recognizes the importance of providing free legal aid.
What do you want to achieve in 2017?
I believe that it is extremely important to continually develop and follow global trends in order to maintain a successful business. Consequently, digitalization, as an important global trend, has been recognized as an imperative goal which needs to be accomplished. In our law firm, the aforementioned process is still ongoing and I hope it will be completed in 2017.
How do you measure your success?
I am more than proud to say that I have the privilege to work with more than a hundred young professionals, to see them grow professionally every day and become experts in the fields of their interests. I genuinely believe that young people are those who change the world and we should support them and give them the opportunity to succeed.
Do you have a mantra or motto you live by when it comes to helping clients?
Audiatur et altera pars. I truly believe that it is important to let the other side be heard as well, regardless of the situation. To run a successful business, amongst others, also means to adapt, to compromise etc. In order to do so, it is crucial to see a certain matter from a different angle and standing point and that is only possible if you let others speak and express their opinion. All things considered, it is crucial to listen to the other side.
Dispute resolution law revolves around resolving disputes in and out of court, from divorces to evictions, and from partnerships to breach of contract, but also on much larger matters than span over several jurisdictions and cover several parties. The most common ways to resolve disputes are mediation, arbitration and litigation, preferably in that order. For each of these processes, the right lawyer, mediator or arbitrator is crucial.
With a focus on the Caribbean, we touch base with Donna Allison, Principal at D. Allison & Prowell Co., a Trinidad & Tobago based law firm, and a specialist in dispute resolution, who discusses the aforementioned dispute solutions and challenges therein.
Does mediation suit certain types of dispute more than others? Why?
In the Caribbean, there is a growing trend for the parties to agree the solutions to their conflict instead of having an outcome imposed by a court using law that may be indifferent to the underlying nuances of the dispute. Even in the courts, the judges are encouraging parties to reach agreement and settlement. This permits a win/win outcome for parties that is not the usual outcome of rights adjudication. This approach, though often thought to be preferable for family type conflicts, works just as well in commercial disputes, where the costs and delay of prolonged litigation could be as detrimental and devastating as an adverse judicial outcome.
How can you promote mediation as a more positive choice than litigation?
Parties have become wary and at times unhappy with the judicial process. The times and costs frequently cause injustice, and justice delayed is justice denied. Mediation promotes continued good relations between parties who are likely to have continued interaction, fraternally and/or commercially. Hostility and bad-feelings tend to subside after a successful mediation. Parties are more likely to honour the undertakings they have voluntarily assumed in mediation, than to accept without appellate resistance a judgement of the court that they believe to be unfair. Where parties believe they have been unfairly treated, disputes can be prolonged by repetitive appeals and court machinations.
What challenges are raised by arbitration, and how can you navigate them to ensure that arbitration grows in popularity?
Arbitration mimics litigation, in that the result is imposed by the evaluation of the dispute on rights and the imposition of a verdict on the merits of the competing interests of the parties. Although it could be quicker and more controlled than the court process, the outcome is dictated by law without room for fairness or fairplay. It therefore tends to be preferred for commercial rather than family related disputes.
Arbitration techniques can however be adjusted to find utility in family related disputes. Often when these parties disagree at mediation, a gentle nudge that suggests a consequence that is adverse at the end of the process would be useful. While some litigants may relish their day in court if mediation is not successful, and therefore strategically resist settlement at mediation, the power of the arbitrator to impose an adverse verdict would be persuasive.
The challenge of arbitration is to ensure that the process does not become so stringent and burdened by procedure and rules, that the ultimate purpose for a resolution of the substance of the dispute is delayed or buried. It however provides a good medium where mediation fails, but the court process may be too cumbersome.
As Lead Counsel, what matters are most prominent in Trinidad and Tobago, at the moment?
In Trinidad and Tobago, as a small developing country but one of the State leaders in the Caribbean, a major judicial challenge of the society is to escape the colonial shackles of its legal heritage and to create a body of laws, conventions and legal practices that are consistent with its indigenous culture and norms.
When the Parliament/Legislature leaves its work incomplete, it is the Judiciary that must forge balance between the power of the Executive and the rights of the individual to the protection of the rule of law. Cognisant that it ought not to robotically rubber stamp the juridical mind of larger more developed judicial systems on our fragile system, the court’s task is made even more difficult under a Constitution where the separation of powers is more ideological than realistic.
Hence in public law, this has resulted in is a growing body of innovative, creative judgements in constitutional law and judicial review as the courts juggle this balance. The power struggle is mirrored in private law, as commercial interests and industry expand. Complaints of abuse of power in an economically uneven playing field fuels the necessity to inject natural justice into commercial contract and dealings – a path that is heavily resisted and avoided in the past. It tests the courts resourcefulness to provide a level and playing field where confidence in the judiciary is fostered and all society is content that the judiciary is standing guard.
As a Thought Leader, are there any legislative developments you are working towards implementing or exploring further in the realm of mediation?
I have used a self-developed form of mediation extensively and successfully in the settlement of both family related and commercial disputes between all litigants of varying means, status and backgrounds. It has become a norm in my practice to invite parties to a Joint Conference to explore the possibility of settlement, in the presence of their attorneys, behind closed doors and without prejudice. The process, though unorthodox, draws on mediation and arbitration techniques and is grounded in respect by litigants for their respective positons in the conflict, a genuine desire to find resolution, and the ability to remove the conflict from rights, rightness and righteousness to fairness and equity. Judges have been accepting the outcome of these conferences, approving and converting the compromises reached to court orders, leaving parties, amicable and empowered.
Throughout your years of practice, how do you think the Caribbean Court has developed? Is there anything you would change?
Caribbean jurisdictions maintain their internal court systems at the first instance and secondary appellate levels. Presently, we have a Caribbean Court of Justice that functions as a tertiary appellate court for some jurisdictions and administers Caricom Treaty. Some jurisdictions continue to have the Privy Council as its tertiary head.
There is a live debate as to when and/or whether the Privy Council should be fully replaced as a tertiary court for the Caribbean; there are meritorious arguments on both sides. To my mind, it is more when rather than whether, as it is doubtful for how much longer the UK court system will tolerate financially and otherwise the burden of this appendage. I am sure that the intellectual competence resides within our collective judicial intellect, and I would feel good as a Caribbean citizen to accept the mantle for our judicial responsibility before it is thrust upon us.
Is there a case that you will always remember; what challenges did it post, how did you overcome them and how did it shape you for future disputes?
My best cases are not always those that my client’s interest has prevailed or that have the greatest value, or received the most fees or publicity. My best judicial memories are those that, by their conclusion, leave my clients satisfied that their rights have been robustly guarded and advocated.
One of my most treasured memories was very early in my career as an advocate. After fighting doggedly to obtain an injunction, it was refused. As I struggled to come to terms with the youthful gamut of emotions and disappointment, my client, having long settled his bill with me, took out some cash from his pockets and in a kind, grateful and respectful gesture stated: “Don’t worry you did your best!”
I was overwhelmed. Not only was I being offered more than my fee voluntarily by my client, but his case had not been favoured by the court. Nevertheless, he was gratified that his position had been ventilated and by doing so he felt vindicated; I was humbled. I consider an outcome that leaves my client satisfied, his case so effectively articulated that he feels vindicated and pleased, to be my duty to each client, my overriding goal and most fulfilling objective. As an advocate, this is the best contribution that I could make to my profession.
Starting a business can entail an extensive net of heavy weighing legal and financial considerations, not to mention the array of management decisions and marketing worries. This month Lawyer Monthly hears from Neil Williamson, Founder and Director of EM Law, on how his firm helps small enterprise businesses confront the pit of complexities they are expected to overcome in order to successfully emerge as a confident, growing and profitable business.
How did your legal career path lead to specialising in commercial law surrounding small businesses?
I specialise in two areas: commercial law for small businesses and commercial law for businesses operating in emerging and frontier markets.
I trained at a large firm in the North West but I wanted to get to London as soon as I qualified in 2001. I intended to be a litigator but was persuaded to meet the senior partner of a firm in Hampstead who needed an assistant to work on corporate deals. Although the firm was small it was punching well above its weight in terms of the size of the transactions that it was involved in and they were super keen to take me. I thought joining the firm would accelerate my career because of the exposure I would get and I thought it would be good to get more corporate experience anyway if I went back into litigation.
I was thrown in at the deep end and had a lot of responsibility. For example, at 1 year PQE my boss went on holiday and I was left to handle the final two weeks of a £190 million acquisition, which involved following the “whitewash” procedure. Most of the time we had city firms on the other side of the table. On the whole I was doing deal after deal – mainly buying and selling private companies - but as part of firm with a corporate team of just me and the senior partner I also had to handle a wide range of commercial work and often this was from small business.
When I left the firm, some of the smaller clients followed me and I went out of my way to support them because of the loyalty they showed me. It meant that I was working with entrepreneurs from an early stage in my career. As I continued to work in smaller firms, my clients tended to be smaller businesses and I carried on covering a wide range of work. The one exception was my last firm, where, although we did act for a few small businesses, on the whole I was helping large clients operate overseas.
As the Founder of E M Law, what are the principal priorities for your firm and your legal career scope?
The priority for the business is to grow. I want to be part of a firm that has great people onboard, a fun and interesting office environment, and happy clients. I believe it is possible to achieve this.
How do you believe you and the firm meet these priorities, and what are the challenges you encounter daily in doing so?
Our client base is growing steadily, partly through referrals and partly through my efforts at networking and marketing the business. We have a long way to go but every client who tries us out comes back for more, so I’m confident that we are offering a service that clients value.
We are also building a great team. Again, it’s steady rather than rapid growth. The doors are not open for anyone who wants to join. Experience is hugely important but what is also very important is personality. I think for small business especially the clients want to speak with someone who is personable, open, who can listen, who is down-to-earth.
The challenges are many! Lots of small businesses do not use lawyers because they think that lawyers are going to add unnecessary complexity to the job and charge too much. The thing is – they are right in a lot of cases! Or there are businesses using lawyers, but they are not happy with them. So how do I convince potential clients that we are different and that they should give us the chance to show that we are going to add value and make life easier for them? It’s hard because you are asking someone who doesn’t know you to trust you. There are things that you can do to make it easier for a potential client to take that step, but it’s always going to be a challenge.
In terms of building the team it is not easy getting the right people onboard, and it takes time. The great thing is that it is easier than it used to be because our profiles are out there on social media and the technology enables us to work remotely, so I am not restricted to only engaging people who can come into the office.
Briefly, what are the main considerations you advise your clients on in UK investment, technology, IP, and other matters? What are the main legal talking points of today’s small businesses?
For transactions such as acquisitions and investments I tend to spend time at the outset advising on the best structure. It is crucial to get the foundations right to avoid wasting time and money down the line before and after completion. I want to understand the commercial rationale for a deal and what the client thinks they are going to get out of it. I look for the simplest structure to put in place that is going to give the client want they need and that the other side can live with. It’s not always possible for things to be simple but we’ll make the process as painless as possible.
Regarding specific considerations for transactions – the main areas where I am particularly involved in are around earn out/retention provisions, warranties, exclusions of liability and analysing due diligence.
For technology clients, one of the main considerations before drafting or negotiating their supply of software/services contract is checking the underlying contracts that the client already has in place from its own software/services suppliers. It sounds obvious, but I see this being overlooked quite often. I also tend to get heavily involved in the licensing and service level arrangements and of course the exclusion of liability clauses.
Main legal talking points for small business: using share schemes to incentivise staff, responsibility around handling data (particularly in the technology sector), knowing when to reach out for legal advice and who to go to.
What have you been working on during the last few months? Are there any cases which spring to mind as particularly interesting? Have there been any particular complexities involved?
An employee share incentive scheme for a medium sized international business. This has thrown up all sorts of issues, but I have to admit my involvement has been minimal. One of our consultants is an expert in these matters and she has been leading on it and doing an outstanding job.
Helping a telecoms client with a contract where they will be supplying hosted applications services to a major player in the internet services industry and their customers. With the same client I have also been drafting a guarantee that they will give to their resellers against PBX dial-through fraud. This is complex work for anyone. It is crucial to understand the client’s business and to get the drafting right because if there are things missed in the guarantee wording the adverse effects for the client could be huge.
I have been helping a client with a contract to supply technology solutions – eDiscovery and forensics – to a large city firm. There was already a framework agreement in place between my client and the firm so, rather than re-invent the wheel, I drafted the documents – work order and service level agreement to fit with the existing framework arrangements. I wanted to avoid a situation where the client and its customer were going to be negotiating unnecessarily, but it was not easy bolting on the new services to the old.
I just helped a shareholder deal with a messy situation with a former colleague who had left the business. My client had been badly advised and when he came to me he was in a difficult position with his former colleague still holding half the shares in the company and wrongly telling customers that his business had taken over my client’s. In the end my client got all the shares in the company back and a settlement agreement to put a stop to the passing off. I did not find this a complex case from a technical perspective – the challenge was to keep a lid on legal costs with the other side wanting face-to-face meetings to resolve things. We avoided these and so were able to keep the legal spend in check while still getting what we wanted.
Simon Webster is CEO of CPA Global, having worked at the company for more than 15 years in a number of business development and operational roles. CPA Global is the world’s leading IP management and technology company, trusted by many of the world’s respected corporations and law firms. In November, the company launched The IP Platform™, a new integrated destination to digitise and automate all IP activities across the entire idea lifecycle. Here Simon speaks about their aim as a company and what they offer to the IP sector.
Can you briefly describe the USP and original ideas behind The IP Platform™?
Prior to joining CPA Global, I played my part in the UK Financial Services’ rapid technology-led revolution. Throughout my time at CPA Global, I felt that the IP industry had been starved of the transformational effects of modern technology.
Ironically, IP has played a central role in the innovation industry for centuries, yet it is one of the last major industries to fully benefit from the disruptive effects of technology. A recent CPA Global survey of our customers and key industry professionals demonstrated the importance of technology to the industry, with more than two thirds of respondents believing that technology will play a more prominent role in the future.
When I took on the role of CEO last year, I set CPA Global on a course to develop technology and capabilities that could bring significant benefits to the industry, something we are now calling the Future of IP. The IP Platform™ is CPA Global’s response to this challenge. Its aim is to use technology to achieve two things: firstly, to vastly improve efficiencies in terms of day-to-day IP activities and collaborations. The second is to enable IP professionals – whether in law firms or corporates – to easily access context-sensitive, insightful information about the subject matter they are working on, as they work on it.
What does The IP Platform™ offer to its users that other online platforms do not already offer?
The IP process is globally complex and has a high cost of failure. Every individual IP transaction comes with its own specific workflow, its own rules and, of course, its own invoice, significantly increasing the amount of administration associated with the process. It relies on reams of paper work being completed, and processes can take months, if not years, to be concluded. Those claiming to automate IP processes across the world still demand a lot of customer intervention, essentially offering little more than an outsourcing service with the accompanying risks.
The situation can be even more complex for law firms who are dealing with multiple clients with different working practices. This might even necessitate numerous teams in the same firm working in different ways to support clients. In these circumstances the chances of delivering a professional looking service are severely hampered by the scale, complexity and personalisation required just to get things done.
The IP Platform™ is an integrated platform of data, software and services that connects disparate workflows together and brings relevant data right into the workflow itself. This approach allows IP professionals to be more efficient, accurate and effective by empowering them through technology rather than replacing through outsourcing.
The IP Platform™ aims to offer the industry:
What is the intended purpose and scope of the product, and how will it contribute towards the IP segment?
IP professionals are working in a rapidly changing global environment. Think about how the internet has impacted on brands alone. There are more than 1,000 top level domains (TLD) for internet addresses (not only the likes of .com and .biz but also country-specific domains). Almost 700 of these have been created since 2014. Brands now need to ensure they register all domains relevant to them and monitor for competitors or members of the public using the trademark on non-affiliated websites. This was simply not necessary 20 years ago. Modern IP management needs to be driven by technology if IP lawyers are to have any chance of delivering effective counsel.
The IP Platform™ aims to ensure that, in one simple and accessible destination, all IP information is recorded, referenced, connected to other relevant information and analysed for insight.
How does the software analyse data and create unique business insight?
This is one of the most exciting aspects of the technology, helping IP Professionals to create true business insights from IP and propel the work they do into the boardroom. Big data covering vastly more than just the IP itself, combined with predictive analytics, enables companies to delve deeper into information that powers business decision making, using insight from data and trends from the past to forecast the future more accurately.
In the past, this has been limited by the processing power of computers to analyse data, but developments in machine learning mean that data analysis that previously would have taken months to complete is now available in seconds. This technology is being applied across many industries to solve the most complex problems, and the IP industry is finally at the forefront of a transformational change.
Many leading IP organisations and law firms now routinely measure revenues that patents generate against the cost of protection to make more informed decisions about filings and renewals. A further step, however, would be to identify both internal and external data sets (such as market share and market growth potential) that are relevant to a particular patent, and use predictive analytics to evaluate its strength and relevance. This delivers a far richer and more granular overview of the patent’s potential across different markets and territories. Combine this insight with greater workflow automation of the decision-making process and the potential power of The IP Platform™ becomes clear.
At a more strategic level, understanding global patent asset landscapes and filing activity provides indications into future direction of not only products, but entire industries. Identifying which companies or individuals are most active enables companies to plan future product direction, identify risk and possible collaborators and make R&D investment more effective. For example, should future strategy be driven by internal growth or by acquisition? In the case of acquisition, which companies are targets and what strengths do they bring? Understanding the patent portfolio of a potential acquisition or merger target enables businesses to strategically focus on relevant areas.
How important is innovation in the IP landscape, for creators, and in the profession, for the lawyers of today?
Innovation is central not only to the IP landscape but to business growth. So much business value is now tied up in IP portfolios. Understanding and exploiting that value relies on accurate data that can deliver business insight.
For IP lawyers, as the importance of IP value grows in a globalised economy, its role will move up the corporate chain. We are already seeing a small number of Chief IP Officers, and the number of experts in the boardroom is bound to grow as the value of IP increases.
What is next on the horizon for CPA Global?
Rolling out The IP Platform™ to our customer base will be a significant focus in the next few months. We are also planning to integrate new software services and apps that transform the amount of time and effort IP professionals will need to put into routine tasks. IP lawyers in the future will be spending less time on day-to-day tasks and more on shaping business strategy. CPA Global wants to be with them all the way.
ACCO Brands Corporation (NYSE: ACCO), one of the world's largest designers, marketers and manufacturers of branded business, academic and consumer products, recently announced that it has signed a definitive agreement to acquire Esselte Group Holdings AB (Esselte), a leading European office products company, from private equity firm J.W. Childs for $333 million in cash.
Esselte's 2015 sales were $458 million with adjusted EBITDA of $60 million. ACCO Brands plans to combine Esselte with its existing European operations, creating a pan-European leader in branded business products.
Esselte is a leading European manufacturer and marketer of office and consumer products. It takes products to market under the Leitz, Rapid and Esselte brands in the storage and organization, stapling and punch, business machines and do-it-yourself tools product categories. Through its combination with Esselte, ACCO Brands increases its scale and enhances its position as an industry leader in the European marketplace.
The transaction will be funded with cash and Euro-denominated bank debt. As part of the financing, and contingent upon the deal closing, the company intends to refinance its existing senior-secured credit facilities.
As part of the acquisition, ACCO Brands will assume an estimated $160 million of unfunded pension liabilities, net of associated deferred tax, predominantly in Germany. German pension law does not require pre-funding of pension liabilities, which will be payable over approximately the next 40 years.
The closing of the transaction is subject to the satisfaction of customary closing conditions, including regulatory approvals, and is expected to be completed in early 2017.
Turkish law firm, Paksoy, with a team led by Stéphanie Beghe Sönmez (Partner), together with Burak Kepkep (Senior Associate) and Zeynep Toma (Associate), advised ACCO Brands on the Turkish law aspects of this transaction, while Latham & Watkins acted as international counsel.
