Understand Your Rights. Solve Your Legal Problems
A consortium formed by Antin Infrastructure Partners, ICAMAP, an independent real estate fund manager and Borletti Group, a private investment entity focused on retail, luxury and real estate, ranked first among bidders and has been selected by Ferrovie dello Stato Italiane (FS) and Eurostazioni as the winning counterpart for the purchase of a 100% stake in Grandi Stazioni Retail (GSR).
GSR will operate the new long-term concessions providing exclusive rights to the commercial leasing and advertising spaces of the 14 largest Italian railway stations, as well as the concession for the redevelopment and management of two railway stations in the Czech Republic.
The consortium formed by Antin, ICAMAP and Borletti presented a differentiating and robust industrial project for GSR enabling it to deliver the winning bid, for an Enterprise Value of €953m. Antin’s infrastructure expertise was complemented by ICAMAP’s experience in commercial real estate and Borletti Group’s knowledge of travel hubs and Italian retail.
The consortium intends to fully leverage on the high quality of GSR’s assets as well as its outstanding development potential to take the company forward. Italian railway stations benefit from the strong growth trend for retail within high footfall travel hubs, as well as an increase in high speed rail tourists and business customers.
The consortium’s industrial project, in close collaboration with FS Group, aims to complete the transformation of railway stations that began 15 years ago and deliver excellence to customers. The consortium expects to bring world class expertise and skills to the company and is confident it will provide an excellent retail experience to the 790 million visitors using these key Italian railway stations every year.
Foglia Cisternino & Partners advised in respect to tax matters, with a team led by Founding Partner Giuliano Foglia.
Appleby acted as Bermuda counsel to Triton Container International Limited (TCIL) in its merger with TAL International Group, Inc., a NYSE-listed, US company (TAL). The transaction has created the world’s largest lessor of intermodal freight containers and chassis. The combined business will have USD8.7 billion in revenue generating assets and an estimated global market share of 25%. TCIL and TAL have combined under a newly-formed Bermuda holding company, Triton International Limited (TIL) which is now listed on the NYSE. The deal closed 12th July.
Appleby advised on all Bermuda aspects of the transaction, working closely with US counsel and TCIL to identify potential challenges and devise solution-driven strategies. “This matter was innovative and complex as it involved a listed US company and a Bermudian company coming together through two separate mergers (one US and one Bermuda) under a single newly formed Bermuda parent company that is now listed on the NYSE,” said Steven Rees Davies, a Bermudabased Appleby partner who led the firm’s deal team. Further comments can be found in the interview below.
Rees Davies was assisted by Senior Associates Sally Penrose and Gary Harris, Associates Tiffany Boys and Shannon Cann, and Dispute Resolution partner John Wasty.
TIL is the world’s largest lessor of intermodal freight containers and chassis. With a container fleet of nearly five million twenty-foot equivalent units (TEU), TIL’s global operations include acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis.
Please tell me about your involvement in the deal?
We acted as Bermuda counsel to the Triton International Limited group of companies advising on all Bermuda aspects of the transactional structure and implementation of the Bermuda steps critical to completion. I was the lead partner on the deal, supported by senior associates Sally Penrose and Gary Harris as well as associate Shannon Cann of our Bermuda corporate team, with partner John Wasty of our dispute resolution team providing additional support on the more complex and contentious matters.
Why is this a good deal for all involved?
It combines two of the largest intermodal freight container leasing companies in the world, with combined revenue earning assets of $8.7 billion and an estimated global share of 25%. The synergies are expected to save $40 million annually in a market where the merged company is being touted as the most capable and most efficient lessor of intermodal freight containers. Shareholders of both companies received shares in the new merged company rather than one side being bought out and so all interested parties will have the opportunity to benefit from the expected synergies.
What challenges arose? How did you navigate them?
As with all multi-jurisdictional transactions of this size, complexities arose from the very beginning of the transaction. The number of legal issues and matters needing to be considered and resolved on a daily basis created continuous logistical challenges, particularly as the continuous flow and turn of documents was dependent upon the swift delivery of advice. No one could afford to put a pen down because there was always someone else waiting for our response.
As a leading offshore law firm, Appleby advises clients around the globe and across time zones so we have to be ready to support clients 24 hours a day, 7 days a week. We created a multi-disciplinary team from both our corporate and dispute resolution practices to ensure we were providing the necessary breadth of experience and knowledge for this transaction. We established the core team from the start and then expanded and contracted as the work flow changed to ensure continuous delivery of support and legal advice through a cost efficient approach at all stages of the transaction.
A debt rescheduling agreement was recently reached between Saaten Union Research, a firm specialised in the production and marketing of varieties of hybrid and non-hybrid cereal seed, and its creditors, seed producers, suppliers, and shareholders.
The agreement was approved by the Court of Compiègne in July.
Saaten Union Research was advised on this matter by Jones Day, with a team led by Laurent Assaya, Jacques-Albert Weil and Hugo Cosquer. Deloitte also advised the company.
Agrial was advised by Libraliance, with a team led by Anne-Noëlle Charvillat-Carrez.
Axereal was advised by De Pardieu Brocas Maffei, with Philippe Dubois and Pauline Bournoville.
Soufflet Agriculture was advised by FIDAL Trust, with Bruno Berger-Perrin.
VIVESCIA was advised by Renault Thominette Vignaud & Reeve Jason Reeve.
Please tell me about your involvement in the deal?
We assisted Agrial, one of the major French agricultural and food cooperatives and a Libraliance long-term client, which we’ve been accompanying on their corporate-finance issues in support of their legal department, in particular in organising Agrial group’s governance and settling partnerships with innovative or RSE companies. In the deal, we used our more than 20-year expertise in corporate-finance and collaborative practice to reach a balanced, respectful and we trust lasting agreement.
Why is this a good deal for all involved?
Parties in this deal are all players in the cereals market, acting either as supplier or as customers.
The deal preserves the coops’ interests, allows Saaten to pursue their activity, and preserves key relationships and business operations between all parties involved. All parties will continue to work together after the settlement is agreed.
What challenges arose? How did you navigate them?
Principal creditors of Saaten were the coops. Approximately 20 coops were involved, with very different debts-sized amounts. Number of parties and size of debt was a challenge, but all coops shared the same goal - prevent draining, costly and timeconsuming court battles, and preserve relationships among themselves and with Saaten with whom long-term responsibilities and connections remain after the dispute is resolved. Establishing each coop’s concern and agreeing on a mutually agreeable option enabled all coops to speak of one voice.
Time constraints and finding an amicable deal satisfying all parties’ concerns was also crucial. Creditors wanted to make sure they would be paid and preserve their priority right on other creditors, while Saaten wanted to reach an amicable agreement swiftly in order to pursue their activity. The settlement agreement was negotiated on a short period of time with milestones.
Operational and financial constraints also arose. The issue was to find a method to verify the agreed ratios that were satisfactory for all. This was solved mutually and privately with active, direct clients’ involvement and namely their operational teams.
The French investment fund France Brevets has recently granted the electronics provider Samsung important patent licenses for the use of NFC technology. The companies agreed on a contract, according to which Samsung is permitted to use NFC patents for contactless data transmission over a very short distance in its products.
The NFC licensing programme, which France Brevets markets together with its partner NFC Technology LLC, includes patents by the companies Inside Secure and Orange. The licenses for Samsung are the result of a settlement between the parties, for which the German proceedings were one of the decisive factors. Apart from Samsung, LG (2014) and Sony (2016) have already purchased licenses from the portfolio. “The NFC patents protect important, highly developed technologies, from which other important market participants can now also profit, for example when paying by mobile phone,” explains Gottfried Schüll of Cohausz & Florack (C&F), who represents France Brevets.
The patents purchased by France Brevets protect high-quality innovations resulting from private – in particular medium-sized – and public technology research. The company’s strategy is to arrange these patents into a portfolio and to grant licenses to international companies. In doing so, France Brevets acts completely in accordance with patent law: it is committed to ensuring that inventors draw a reasonable return on their research investment.
Please tell me about your involvement in the deal?
The German team consisting of myself at COHAUSZ & FLORACK as key account and Axel Verhauwen at Krieger Mes represented France Brevets in multi-patent infringement actions filed at the Landgericht Dusseldorf against Samsung as well as the corresponding nullity proceedings initiated by Samsung at the Bundespatentgericht in Munich.
The infringement actions against Samsung have been preceded by infringement actions against LGE and HTC. While the LGE proceedings have been settled at an early stage the cases against HTC are pending. In these HTC cases victorious verdicts have been obtained by which the German first instance courts confirmed infringement and validity of Near Field Communication (NFC) patents. Also against this background France Brevets granted to Sony a worldwide royalty-bearing patent license.
Why is this a good deal for all involved?
France Brevets licensing program for NFC grants device manufacturers access to the patents on embedded security solutions especially for mobile devices based on secure wireless short range communication. The licensing program addresses various categories, such as smartphones, and offers a wide range of services such as mobile payment.
Samsung as LGE and Sony by the actual deal got access to the NFC patent portfolio of France Brevets covering past and future products. France Brevets confirmed its capability to execute patent and licensing strategies that best serve the interests of the patent holders and partners of France Brevets.
What challenges arose? How did you navigate them?
The patents asserted partially relate to standardized NFC technologies but the relevant standards do not have to be used e.g. in smartphones as alternative technical solutions are available. This is proven by the fact that products of competitors are making use of such alternatives which make the implementation of the relevant standards optional.
In the ground-breaking HTC proceedings we have been able to convince the court that under these conditions the requirements imposed by the FRAND jurisdiction developed by German and EU courts are not applicable and accordingly there are no FRAND restrictions to the enforcement of the injunction claim.
Ford recently announced its intent to have a high-volume, fully autonomous SAE level 4-capable vehicle in commercial operation in 2021 in a ridehailing or ride-sharing service. To achieve this, the company has acquired the Israel-based computer vision and machine learning company, SAIPS, to further strengthen its expertise in artificial intelligence and enhance computer vision.
SAIPS has developed algorithmic solutions in image and video processing, deep learning, signal processing and classification. This expertise will help Ford autonomous vehicles learn and adapt to the surroundings of their environment.
Ford is also investing in or collaborating with three other startups to enhance its autonomous vehicle development, doubling its Silicon Valley team and more than doubling its Palo Alto campus. The other three firms are Velodyne, Nirenberg Neuroscience LLC, and Civil Maps.
In the sale of the company, SAIPS was advised by Gil Mizrahi from the Israeli law firm H-F & Co.
Hirsch-Falk, Mizrahi, Gillat, Oren was the financial and tax advisor in the due diligence process and during the transaction between SAIPS and Ford. Atir Jaffe and Keren Shmueli from the Israeli law firm Pearl Cohen Zedek Latzer Baratz were the legal advisors in the due diligence process and during the transaction.
Please tell me about your involvement in the deal?
H-F & Co. is a leading Israeli law firm that represents tech companies at all stages from entrepreneurs and start-ups to Unicorns and multi-billion dollar global technology companies and provides a full range of legal services in various legal practices including, among others, M&A, commercial and technology transactions, taxation and intellectual property. In the past year the firm provided tax advice in many M&A transactions, including the acquisition of REPLAY by Intel, Magnacom by Avago, Discretix by ARM, Skybox by Providence, BillGuard by Prosper Marketplace, asset purchase of Broadcom by MaxLinear, etc.
In the SAIPS-FORD transactions we provided tax services to SAIPIS, its shareholders, employees and consultants. These services included structuring the deal in the most efficient manner from a tax perspective, tax due diligence, drafting of the tax provisions in the share purchase agreement and obtaining withholding tax certificates and beneficial audit agreements from the Israeli Tax Authority for the shareholders of SAIPS in connection with the consideration that they received in the framework of the transaction.
Why is this a good deal for all involved?
SAIPS is an Israeli based company focusing on developing machine learning and computer vision, with technology that brings image and video processing algorithms, as well as deep learning tech focused on processing and classifying input signals, all key ingredients in autonomous vehicle tech. Following the acquisition, SAIPS, which will continue to operate under its current management as a wholly owned subsidiary of FORD, will help FORD develop the advanced artificial intelligence algorithms, which will be crucial to autonomous cars’ functioning.
Before its acquisition by FORD, SAIPS had received no external investments and SAIPS’ entrepreneurs were its sole investors.
What challenges arose? How did you navigate them?
The main challenge in the transaction from a tax perspective was the classification of the consideration received by one of the founders of SAIPS as capital gains even though it was contingent upon the future employment of such founder in SAIPS following the closing of the acquisition. In order to achieve this outcome, the share purchase agreement was drafted to comply with the criteria set forth in previous tax rulings that we had obtained from the Israeli Tax Authority in similar transactions.
Blackford Capital, a national private equity firm headquartered in Grand Rapids, Mich., recently announced its investment in Chesterfield, Mich.-based Davalor Mold Corporation (Davalor), a leading manufacturer of injection moulded plastic products.
Talmer Bank provided financing for the transaction, which is the eighth by Blackford’s Michigan Prosperity Fund, which invests in Michigan companies to generate best-inclass equity returns and support the state’s economy.
With nearly 40 years of experience in the injection moulded plastic products industry, brothers Dave, Orm, and Al Bernhardtfounded Davalor in 1979. Davalor’s products are primarily sold to the automotive sector and include crucial safety equipment, such as seatbelt retractor components, buckle covers, webbing guides, air bag systems, and other products. In addition to its wide range of quality products, Davalor also sets itself apart from the competition with custom manufacturing capabilities and exceptional customer service.
“We believe that Davalor’s production processes and in-house tooling and engineering capabilities make it one of the most versatile injection moulded plastics producers in the industry today,” said Martin Stein, founder and managing director of Blackford Capital.
“Its strategic location in the Metropolitan Detroit area allows the Company to provide its customers with technical input early in the product development process, while also offering cost-effective support to its Tier 1 customers. The Company has established a strong presence in the automotive manufacturing industry throughout the United States, and we see opportunities for continued growth in this region, along with significant customer expansion into Mexico. We are excited by the opportunity to not only drive growth at Davalor, but also offer new jobs and advancement opportunities for current employees.”
Could you tell us a little about your work?
I am the president of Diligentia Group, a boutique investigative firm based in Katonah, New York. We work with a number of investors around the world conducting due diligence investigations where we are asked to assess the background and reputation of a potential business partners or key players in a venture before entering into a substantial financial relationship. While that primarily involves conducting in-depth background investigations on some of the key players to identify risk-related issues, we have also identified sources and gathered intelligence to get a better understanding of the reputation of businesses as well.
Why types of risks do your investigations come across?
We pride ourselves on digging deep to find critical issues so that our clients can make more informed decisions. In some cases, our investigations have come across deal-breaking issues where we have found the proverbial “skeletons” in the closet. But in other instances, we find issues that may change the structure of the deal, such as key individuals who have a history of discrimination complaints, CFOs who have a history of financial troubles, executives who have embellished credentials, history of litigation or even criminal charges.
What advice would you give to firms considering hiring a firm to conduct investigative due diligence?
First, “Googling” is not doing due diligence. Too many firms are investing millions of dollars and are not willing to put the resources into conducting proper investigative due diligence. That is, until they have a bad experience. Second, it’s critical that the firm that you hire has the skills and expertise working with these types of transactions so that they can provide clients with information that is timely, accurate and easy to digest. Lastly, each transaction is unique and should be treated that way. For example, transactions in an industry fraught with bribery and corruption should include some additional scrutiny or sourcing checks.
What challenges do you face when you are working on these deals?
The biggest challenge is usually timing. More often than not, the investigative due diligence process is done at the completion of the deal. Given the depth that we look into individuals and the manual nature of the work, such as hand-checking court records, it’s always a challenge to balance tight deadlines with thoroughness. It’s critical to keep an open dialog with the investigator to manage those expectations.
Having built his law practice on energy companies and advising governments on energy matters, this thought leader has contributed to and witnessed the explosive growth of the oil and gas industry in Africa over the last 10 years.
“Centurion Law Group is based on our belief in the potential of this great continent, and our commitment to developing legal capacity in Africa – both in terms of developing talent and developing markets. The firm operates out of our headquarters in Johannesburg and four main regional offices, in Mauritius, Accra, Douala and Malabo – from here we serve all jurisdictions across the region. I’m proud to have led the firm from its inception and to have been able to guide the firm with a vision that unifies our tremendously talented attorneys and support staff.”
“We built this firm on the basis of providing legal services to the energy sector in Equatorial Guinea and Central Africa, but our role, as I see it, is much bigger than that. Pan-African and pro-African, Centurion is an advocate for the rise of this continent – and an example of how firms born and raised in Africa can succeed in a competitive marketplace – and this guides our work. An example of this is our Business Mentorship Program, where entrepreneurs from any of our core markets can submit an application to receive free legal and business advisory services. So far we have accepted five SMEs to the program and look forward to welcoming more.” – Centurion Law Group
What are the biggest issues affecting the oil & gas industries in Equatorial Guinea right now?
Equatorial Guinea’s energy industry enjoys certain benefits. Contract sanctity; a long record of successfully executing major, complex projects; the will to develop and monetize gas reserves, and an ongoing interest in welcoming foreign investors.
The low oil price since 2014 has resulted in a drop in revenues for the government, and consequently reduced government spending on large construction projects. Equatorial Guinea invested massively in energy infrastructure prior to the crash, so it is well placed to weather the storm. It is undeniably more challenging to push through major projects during this time, but as we see with the Fortuna floating LNG development and agreements for the Bioko Oil Terminal and REPEGE petrochemicals plant, deals are still being done in the country.
Two of the major challenges being addressed by policy-makers are involvement of locals in the petroleum sector and the involvement of local financiers in projects. The 2014 National Content Regulation seeks to increase the participation of Equatoguineans in the energy business and Centurion supports this agenda through its strong emphasis on development of local staff. The Ministry of Mines and Hydrocarbons is also looking into ways to increase the involvement of the national bank BANGE in projects.
Equatorial Guinea is a small country that already punches well above its weight in the international energy industry. Despite the challenges brought by the low oil price, the country continues to prioritize diversification and capacity growth – in human resources, education and training, local enterprises and financing – as pillars of its policy.
What are the most common challenges that arise in the financing, management, and negotiations segments of this industry, and how do you navigate these?
The traditional sources of funding for oil and gas projects have always been debt and equity or IPOs. However, lately banks have been forced to introduce tighter lending controls in response to new legislation, caution around risk management and the pressure to deliver an appropriate return. In the case of IPOs, being heavily dependent on oil and gas prices and economic and financial market conditions severely limits investors. In a bid to mitigate this, most investors are turning to the bond market, project partners, private equity and export credit agencies.
Oil and gas is a unique resource in the sense that it depletes once an acreage has been drilled to within an inch of its life, and the entire infrastructure has to pack up and move on. The major challenges surrounding management have to be the need to look for oil and gas in challenging frontier areas, increased difficulty in acquiring acreages, soaring input costs, and difficulty in delivering large capital projects on time and within budget. With the current volatility in oil and gas prices, it has become necessary to accelerate dramatic reductions in project costs and more accurately estimate project costs and time to first oil.
As energy demands rise, and investment within the energy sector increases, what obstacles lie ahead for your clients in Africa?
Providing enough energy to meet the needs of a fast-growing world population with increasing living standards will require major advances in energy supply and efficiency. Improvements in technology and policy with respect to the energy sector will have deep implications for the growth, international competitiveness, economic security and prosperity of developing countries.
In Africa the scale of the challenge and the corresponding opportunities are huge. Less than half of the population of the continent has Oil & Gas access to steady electricity. Putting measures in place to fix that, in many instances, means starting almost from scratch. Combined with moribund legislation and political instability in some countries, we have a long way to go, but we are moving in the right direction.
You often advise governments on legal matters; what are the key considerations to put forth when advising these on the oil & gas industry?
Having built our practice on energy companies and advising governments on energy matters, we have been party to the explosive growth of the oil and gas industry in Africa over the last 10 years. During this time, we have seen countries like Ghana and Mozambique, with virtually no oil and gas experience, suddenly become the focal point of global energy investment.
African nations often have petroleum legislation that is either outdated or inappropriate for the modern energy industry. The foundation of a prosperous energy industry is a modern petroleum code that is flexible and that accounts for all stages of the value chain, and that incentivizes foreign investment while balancing the labor needs of the population. Local content regulations that take into account international best practice are key.
Governments looking to manage a resource windfall must be able to tap into the knowledge of countries and companies that already have experience. For some governments, balancing the interests of investors with the desire to gain revenues can be challenging. In this area, stability and sanctity of contract are as important as financial incentives and the impact of taxes and royalties on the bottom line. This is a global industry and money moves where conditions are best. African governments are working on this premise as they build their energy sectors from the ground up.
How easily is risk managed within this industry and what is your golden piece of advice for your clients?
When it comes to the oil and gas industry, risks abound: political, geological, pricing, costs, supply and demand, and more. It would seem that an already long and established exploration history would have prepared the industry to weather every storm, but the complex nature of this business means that is not always the case. For clients, especially those working in developing nations, careful analysis and building sustainable relationships with international oil and gas partners are invaluable. Forecasting the likely oil and gas prices over the term of the project in order to determine the timing and feasibility of a project is also important.
You are a member of many oil & gas organizations, like the Association of International Petroleum Negotiators (AIPN); how does this help you expand your knowledge and practice in the oil & gas industry?
Learning is how we grow as a firm. Our connections with legal professionals and entrepreneurs through our African and global network are our lifeblood and we are proud to contribute to various legal and energy associations. This also helps us to fulfill our role as a business advisory firm. Petroleum is above all a global business, and it’s a globally competitive business. We never lose sight of our need to keep learning, implementing international best practices in Africa and exporting best practice from African nations’ world-class energy industries to other regions.
The gambling industry is a huge global market and equally, has an extensive array of legal pitfalls. Gaming associations, retail gambling businesses and the like have to be increasingly aware of changes in regulations and laws pertaining to gaming, betting and gambling.
Here Lawyer Monthly approaches Dr. Jason Lane, Chief Executive of the Jersey Gambling Commission (JGC), who details the most recent regulatory developments taking place in Jersey. He covers the rights and protections for the businesses involved, as well as for the consumer. Dr. Lane also talks about the risks and pitfalls of the e-money sector, and gives his thoughts on the recent Brexit vote and how it could affect the gaming industry and law in Jersey.
What legislation currently exists to protect gaming businesses in Jersey?
Jersey is now among the world’s leading firsttier gaming jurisdictions. Admittedly our old laws, introduced in 1964, were rather dated but that all changed in 2010, when the Gambling Commission (Jersey) Law was adopted, and in 2012, when the Gambling (Jersey) Law came into force. These laws provide a level playing field for businesses and clearly set out their rights and duties.
What legislation exists to protect the gaming consumer in Jersey?
Our Gambling Commission Law protects individual customers as well as the Island’s reputation. It contains three guiding principles which ensure that gambling is “palpably free from crime,” “protects the vulnerable” and “fair” – but vitally it also has a social responsibility function and the requirement for the Island to have a social responsibility fund. The fund is Jersey-specific, so we ask remote gaming licensees to either make a contribution to the local fund or show us what contribution they are making within their main markets; we don’t expect them to pay twice. Where we have an operator which doesn’t include Jersey within its market, we expect them to contribute to education, prevention or research within that market.
Jersey legislation is new, up to date and, importantly, is now capable of allowing rapid change without recourse to the States of Jersey, the Island’s legislature. Article 9 of the Gambling Law allows the Commission to adapt and refine licensing policies through consultation rather than legislative review. This means that Jersey can adapt its regime very quickly, which is a huge advantage over the previous system. That said, the law doesn’t exist in a vacuum and companies need to also abide by other laws, such as our data protection legislation and anti-money laundering provisions.
Is there any way you would see these laws changed for the better?
The Island’s financial services regulator, the Jersey Financial Services Commission, has established a robust and effective regulatory regime. It has an excellent reputation and has helped to establish Jersey as one of the world’s leading centres for financial services. For historical reasons, the JFSC is the supervisory body for AML for the sector – as the JGC hadn’t been formed when that legislation was passed - but I can see a clear argument for designating the JGC as a supervisory body for anti-money laundering in the future, in respect of commercial gambling. It would avoid some duplication and could make the Island even more attractive to potential licensees. However, we know the current system works because our existing licence holders welcome the challenging regime.
What is the legislative relationship between Jersey and the UK government in the gaming sector?
Jersey is not part of the United Kingdom, it has its own government and controls all aspects of domestic policy. That said, Whitehall is consulted in the law-drafting process – not least because all Jersey laws have to receive Royal Assent, through the Privy Council, before they come into force.
Because of a change in UK policy before adoption of the new point of consumption regime, Jersey failed to be included in the UK ‘white list’ of approved gambling jurisdictions. We are obviously pleased that the white list has gone and we now operate on a level playing field. Operators can now decide where to be licensed based on the benefits of a particular jurisdiction rather than a legislative anomaly. Jersey also has Memorandums of Understanding with a number of jurisdictions, including the UK, which is helpful where you have common licensees across jurisdictions.
Might the recent Brexit decision affect Jersey’s gaming law in any way?
Brexit is unlikely to affect the Island’s gambling laws because we only issue licences for companies to operate from or within Jersey, but clearly companies may have to hold national licences for EU states. I have no doubt that jurisdictions like Jersey will remain important and a natural home for corporate headquarters or offshore subsidiaries. Constitutionally, Jersey is outside of the EU for the provision of services, which includes gambling. The only thing that could happen is that we might lose a conduit of information sharing, through the UK, on what is happening in the EU. That said, Jersey has an office in Brussels so we already have an effective way of listening and communicating. Another positive is that we are members of the Gaming Regulators European Forum, and I have been vice-chair and chair of GREF for the last four years, so I would say we are pretty well-placed and we have excellent connections with other regulators throughout Europe and indeed the world.
Construction disputes have risen globally in value throughout 2013 and 2014 as the market heats up again after the lean years of 2008 – 2012. A combination of economic, legal and behavioural factors can lead to construction disputes. Larger projects are usually long-term transactions with high uncertainty and complexity, so it is impossible to resolve every detail and foresee every contingency at the outset. As a result situations often arise that are not clearly addressed by the contract. The basic factors that drive the development of construction disputes are uncertainty, contractual problems, and behaviour, as well as the availability of cash flow to fund disputes.
Here, Fenella Mason, Head of the Construction team at Burness Paull, clarifies that one of the leading factors driving disputes and risk is the consequences of unexpected changes. Fenella also talks to Lawyer Monthly about the effects of Brexit, the kind of issues that can arise in construction matters, the solutions available, and details the industry roles in identifying legal pitfalls and risks.
What have been the most common legal issues you have dealt with the firm in the last year?
A dominant feature of the last year was claims for defects (as opposed to claims for time and money). It has been interesting to observe the way such claims have played out in relation to PFI contracts in particular. Did the parties really intend that deductions would be made for minor breaches?
Did the parties ever anticipate that the allowable liquidated damages could be so disproportionate to the minor nature of those breaches? Unforeseen events and unintended consequences is a theme which will have consequences for the future. Will there still be an appetite for new PFI projects? How will the perception that the private sector has been unduly benefiting from the public sector impact future procurement models? However, it is a theme which has consequences which extend well beyond the PFI market. Change comes in a variety of forms. It may be legal change, technical change, technological innovation change, process change or indeed change on the scale of Brexit!
Change equates to risk. Who should bear the risk of that change? Who is best placed to manage the risk?
The fact that there will be change, particularly in long running contracts, is foreseeable, even if the details of that change may not be. For current contracts, the risk of change may not fall where the parties intended it to. It will ultimately be a question of interpretation of the words used in the contract, but there is a substantial risk that for current contracts the consequences (financial and otherwise) of the change are not going to fall where the parties thought they would. This is exactly the issue that arose in Arnold v Brittan, currently the leading case on interpretation. And whilst we lawyers love the certainty that this approach produces i.e. the words mean what they say, I wonder how appropriate this approach is in the face of an unprecedented explosion of technology and innovation?
What are the typical contractual issues that clients need assistance with?
One of the key issues which we have seen is a renewed interest in the interplay between insurance and contractual remedies, particularly in relation to latent defects. In many ways the renewed interest in insurance ties in with my earlier comments about the risk of unforeseen events and unintended consequences. I anticipate greater attention being paid, by lawyers and clients alike, to insurance obligations. The decision of SSE Generation Ltd v Hochtief & Other [2015] CSOH 92 was a timely reminder that parties may not fully appreciate how contractual provisions, such as indemnity and insurance, can substantially impact the commercial viability of a project.
The other contractual issue which clients continue to need assistance with is the old chestnut of contract payment dates and notices. 20 years on from the passing of the Housing Grants, Construction and Regeneration Act and 5 years on from the passing of the amendments to it, we are still seeing a lack of understanding of the payment notices process. This may continue to be a regular and reliable source of work for lawyers, but how can such confusion – and hence disagreement and dispute – reflect well on the industry?
How do you go about identifying pitfalls and risks that have been unheard of before by your clients?
The best way to identify pitfalls and risks is to ‘connect the back end of completed projects with the front end of new projects’. The back end of a project tends to be where the disagreements and disputes arise. That is where the lessons can be learnt for new projects. The key to identifying pitfalls and risks for future contracts is to ensure that those lessons are communicated back to those drafting and negotiating the front end of the contract. The lessons might be legal or technical, or indeed both. Either way, this communication is essential. We hold regular “lessons learnt” sessions with clients at the end of projects to facilitate improvements going forward. This is not an innovative approach, but it is a highly effective one.
As a thought leader, how are you helping to develop and implement construction legislation?
The Scottish Law Commission is currently considering reform of the law on third party rights, prescription and penalty clauses, all of which will impact the construction sector. My team actively engage with this process. In my view, Lawyers can and should, take every opportunity to take their clients’ market experience and use it to influence the future development of the law.
Agricultural Law can cover a variety of subjects, from property, tenancy and estate, to insurance, financing and land rights. Further with the advent of modern technologies, agricultural law now also encompasses an array of legal issues, which in conjunction with rural culture, especially require the assistance of expert lawyers by the day.
On this matter, Lawyer Monthly has heard from Bruce Monnington, practising barrister at UK-based Fenners Chambers. Bruce gives particular insight into the typical kinds of legal matters that arise in the agricultural sector, the most impacting changes that are affecting the agricultural landscape, and about the future prospects for this industry’s legal challenges.
What are the most common types of dispute you deal with related to the agricultural and rural industry?
Tenancy matters:
• disputed notices to quit under the 1986 Act, especially Case B (relating to recovery of possession for development;
• succession tenancies under the 1986 Act;
• drafting special clauses for farm business tenancies, e.g. break clauses for development, replication of the succession provisions of the 1986 Act;
• residential farm tenancies: agricultural protected tenancies and assured agricultural occupants (many old farm cottages are very valuable now, whether for holiday lets or as second homes).
Family disputes:
• claims in estoppel/constructive trust in relation to promises or expectations that a farm will be left to a given individual;
• farm partnership disputes.
Disputes arising out of ‘changed use’ of land (such as diversification), for instance:
• whether a right of way to a farm can be used for non-agricultural activities on the farm, such as a livery business, access to a campsite, or even selling off a farm cottage to a private individual;
• I was Counsel in Gainsborough Field v Hyde [2005] EWHC 2229 which considered the meaning of “agriculture” for the purposes of an express right of way, where the farmer wanted to use the land for equine purposes;
• similarly with restrictive covenants for the use of land for agricultural purposes only) and user covenants in tenancies;
• drafting overage agreements, and trying to interpret one’s other people have drafted!
Valuation issues on death:
• availability of agricultural property relief;
• effect of third party rights on valuation, e.g. whether tenancy rights exist or the effect of an estoppel claim on value.
Issues over public rights of way and town/village green applications:
• I have done several public inquiries over the existence of public rights of way, (e.g. on basis of inclosure awards form 19th century) and the existence of town and village greens (TVGs) which can thwart development.
Have there been any recent changes to the Agricultural Holdings Act 1986 and Agricultural Tenancies Act 1995 that have affected your work? If so, please tell me about them.
The real milestone has been the Agricultural Tenancies Act 1995, which re-wrote the landlord and tenant relationship for new tenancies.
Since then, the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006 ironed out some wrinkles in the 1986 Act and the 1995 Act. The most important were:
• enabling an applicant for a 1986 Act tenancy succession to rely on non-agricultural work in satisfying the various tests under the Act for succession (previously, any work in connection with diversification did not count);
• clarifying when a change in the land holding comprising an agricultural holding triggers an FBT.
How challenging is the agricultural sector to work in? How do you overcome these on a daily basis?
The agricultural sector is challenging to work in, engaging a unique set of factors:
• In most respects, agriculture has its own statutory code, and is excluded from mainstream legislation.
• Agriculture contains some of the most complex tests, e.g. agriculture residential tenancies are very complex, as are the conditions for a succession tenancy under the 1986 Act.
• The businesses are increasingly complex and wide ranging, including farming, letting buildings for non-agricultural use, operating diversified.
• Some very significant relations are conducted on a very informal basis. For instance, swapping land, borrowing machinery, allowing occasional use of land by third party, and of course contract farming where absolutely key farming functions are undertaken on little more than a trust basis.
• Many areas of law operate on the basis of the recent past, with documents going back only a few years, whether due to their relevance or perhaps because solicitors only retain files for 7 years. Farmers hoard their records, and come up with letters/documents going back decades. This can be immensely helpful, but also you have to be wary, because the other side can sometimes come up with some old letter which flatly contradicts the position of your own client. You certainly become an expert on old type-faces!
• So I like to meet the client, preferably on their own patch. The client starts pulling out old documents, you can see and understand the issues (sometimes there is something startling obvious and crucially important, that hasn’t been mentioned, e.g. a new barn that has been erected). There is nothing like turning up at the farm, and negotiating a cranky old staircase in a converted outbuilding which leads to the farm office in what may well be a multi-million pound business!
As a thought leader, how have you helped visibly evolve the field of agricultural law?
Through my input and contribution to reform in key areas:
• The passage of the Agricultural Tenancies Act 1995 through Parliament;
• Land registration reform:at the CLA my input was sought on the reform of the law of adverse possession and on the compulsory registration of various 3rd party rights (express easements, chancel repairs). These formed key parts of the eventual Land Registration Act 2002;
• Countryside and Rights of Way Act 2000 -
-Key player in process leading up to the 2000 Act;
-Right to roam introduced, but with significant restrictions and protection for landowners e.g. special restrictions on use by the public during the lambing season;
-Part II of the Act introduced some important reforms to the law of public rights of way, including a rationalisation of the diversion of public footpaths, such as where this helps develop or protect a rural business.
I have also sat on the influential TRIG (Tenancy Reform Industry Group) during key phases of its work both when I was at the CLA and now for the Council of the ALA. This is a stakeholders group, which endeavours to build a consensus on key areas of tenancy law in the agricultural sector that need reform/ change.
Whilst at the CLA and since being back in private practice, I have lectured and written articles on the development of thinking in all of the above areas, on legislative change and the implications thereof. This has included for CLT, Farm Law, and the ALA Bulletin. e.g. easements in the context of diversification. I am also co-author of “Essential Law for Landowners and Farmers” and editor of various agriculture-related titles in the Encyclopaedia of Forms and Precedents.
Do you see the need for any new regulatory changes within this sector? If so, please explain.
I would say no. The whole philosophy of the Agricultural Tenancies Act 1995 was to give the parties freedom of contract, subject to a few basic safeguards. In light of this, there is no need for regulatory change as such – what is needed is quality advice tailored to the parties’ respective interests in each given situation. No longer is it an “off the peg” agreement propped up by a heavy statutory framework; now it is “bespoke.”
The one area in which there will almost certainly be change in the foreseeable future is the Single Farm Payment regime in light of the Brexit referendum. Assuming (as now seems almost certain) the UK leaves the EU, our government will have to introduce its own scheme of agricultural support.
Whilst the present indications from Treasury are that the current level of financial support will be maintained, what is unknown is the legal framework within which that support will be delivered. Inevitably there will be changes in the nature of the property right through which support is made, and a careful eye will need to be kept on developments. As Counsel in Pease v McMillan [2009] EWCA Civ 258, one of the very few cases on the ownership of the Single Farm Payment, I am well placed to advise on this, and I have already been approached by a large estate to draw up fresh terms for its standard tenancy agreement to cater (as far as is possible) for future changes in the system
