Understand Your Rights. Solve Your Legal Problems
Maria Luz Vargas is the Managing Partner of Estudio Fernandez & Vargas Abogados. Her law firm has a client base in Peru and beyond, with international clientele also looking for legal support. With an impressive legal background, Maria speaks to Lawyer Monthly about her journey into law, US and Peruvian relations and how globalisation is impacting the legal sector for the better.
How do you see globalisation changing areas of law for businesses in 2018?
Globalisation has had a strong impact in all business areas. Companies want to expand their markets or areas of operation to countries which have had good economic success like Peru and either start operations or buy local companies. Strong understanding of the business and legal environment is critical to succeed. On the other hand, Peruvian companies have been experiencing strong growth in recent years and they are in turn looking to expand overseas.
This new economic order where companies want to be global players is an important challenge for lawyers who need to have an international background and experience and need to be able to understand and operate in other cultures. A strong understanding of other countries legal systems and ensuring an international network to support our clients worldwide is critical to succeed too.
How are current relations with the US and Peru? What do you think could be done to further improve change?
Current relations between Peru the US continue to be strong. The United States is one of our main trading partners and we have a Free Trade Agreement in place since 2009. Bilateral trade with the United States represent a fifth of all our international trade.
Our government has been committed for the last 25 years to an open trade and investment economy where US companies have played a very important role investing in several economic sectors. This is a very important factor for our Law firm since we have many clients from the US, and we are very active with the American Chamber of Commerce.
The United States is the second market in the world for our exports after China. Our exporters are not taking full advantage of the Free Trade Agreement. We believe our Ministry of Foreign Trade, as well as the National Association of Exporters, should make a bigger effort to raise awareness and to train our medium and small size companies how to take better advantage of this important market and our trade agreement. Likewise, our exporters should also explore and expand into different US markets beyond the main and best known ones (i.e. California, New York, Florida). The American Chamber of Commerce has been very active in inviting commercial missions of different states to meet new trade partners in Peru.
You are qualified in a range of legal areas; which is your favourite and why?
My favourite is corporate law, because it is a field of law with strong interaction with businesses across all sectors of the economy, where a more thorough knowledge and understanding of the activities and operations of your client is required in order to provide effective legal advice. A multi-disciplinary approach is required which impacts our clients’ overall business. We need to understand finance, marketing, commercial operations, every aspect of the business, and how everything is interconnected. This field gives me the opportunity to interact with professionals of different backgrounds and fields which allow me to have a broader focus and better perspective. This allows me to provide more effective legal advice to my clients.
What was your most favourite achievement of 2017 and what are you looking forward to in the upcoming year?
My most rewarding achievements in 2017 were related to our Intellectual Property Department, specifically in the field of Copyright Law. This past year we supported the Art Museum of Lima, with whom we work pro bono, to create a virtual archive of its wonderful and rich collection of Peruvian art. This has never been done in Peru before and has given me the opportunity to contribute to show our rich culture to a broader population.
Likewise, we also had the opportunity to advise the family of a renowned visual artist to manage Intellectual property rights within the framework of an intestate succession after the dead of said artist. Our contribution started when the family noticed the unauthorised use of a visual work during an International Biennal Art Event. In response to this act, we saw the need to implement an Intellectual Property management system, which included the protection of a seal used by the artist as service mark to cover copyright management, preparation of structure of powers between legal heirs to grant copyright licenses of use, preparation of certificates of authenticity for genuine works and authorised copies, and a notice in social networks to inform public about such copyright management. It was a very interesting operation which involved several areas of law: intellectual property, licensing, family law, corporate, art and cultural institutions law, among others.
What enabled you to determine that the legal profession was for you?
I have always been a person that fought for what was fair and just, and would always like to participate in debates, to organise my arguments in order to express my ideas and positions. During my last year of high school we had different guest speakers from different professionals. I had the opportunity to listen to a lawyer describe the profession and his experience and I decided that was the career path I wanted to follow.
What is the most challenging case you have dealt with so far, and how did you overcome such challenge?
The most challenging case I ever faced in my profession was participating in the purchase of a local beverage company, which is one of the icons of our culture, by one of the world leaders of beverages. It was an operation that took place in a time when globalisation was not as extended as it is now, where the acquired company was a family-owned company whose organisation, policies, structure and culture were very different from those of a large multinational corporation. My experience as a Peruvian lawyer, with a US education gave me the experience to successfully advise my clients to pursue the acquisition of this local company and to continue supporting my client to merge both business cultures and continue its operations successfully in Peru.
What was one lesson you learnt when transitioning from law school to practising?
I started being in contact with the legal processes when I was very young and watched the TV show ‘Paper Chase’. I was fascinated with Professor Kingsfield’s class at Harvard University where he taught his students how to support their arguments and especially how to develop legal reasoning. During my last years of law school I did an internship with the Judicial Branch and the first thing I learned was how different reality was from the world at the University, and litigating was not as easy as you saw it in books, where not only good legal arguments were required to win a case but also to understand all the legal structures and mechanisms of the organisations.
Finally, in what way would you say that your law firm stands out from the rest?
Our law firm is a medium-size law firm with lawyers from diverse and strong backgrounds, coming from both the public and private sectors. Having an international experience and strong network is key. All clients, large or small or pro-bono, receive a personalised and high-standard of service. Our structure ensures partners and senior lawyers are fully involved with our clients permanently. As we grow, we make sure we maintain this level of high-quality and personalised service.
María Luz Vargas Chávez
Managing Partner
Calle Jose Galvez N 692 – Of.302
Miraflores, Lima 18, Peru
Phone: (511)241-1360
www.fv-legal.com
Managing Partner María Luz Vargas Chávez was admitted in 1989 after studying at Universidad Católica Santa Maria de Arequipa, Perú and completing her post graduate studies at University of Houston with a Master’s Degree in International Economic Law. Being multilingual in Spanish, English, French, Italian and Portuguese, Maria’s areas of expertise are: Corporate Law; Securities; Banking and Insurance Law; Bankruptcy; Foreign Investment; Antitrust and Competition Law, Consumer Protection and Advertising Law.
Fernandez & Vargas Abogados is a full service law firm which has an in-depth knowledge of Peruvian legislation and our group of exceptionally qualified lawyers are trained to offer legal counsel in different areas of law, combining our comprehensive knowledge and understanding of the business needs of our clients and the different areas of law in order to provide the appropriate legal advice.
Our team maintains the highest ethical standards and always strives for professional excellence, seeking long-term relationships, mutual collaboration and absolute dedication to our clients.
What are common cases you are instructed on as an expert witness?
As an ex insurance broker, commencing a career in 1970 my principal expert engagements concern broking and insurance market practice.
When insurance fails to pay out, the consequences for the business or individual can be life-changing. Typically, there are two principal remedies available to a policyholder; to sue the underwriter or, if there is one, the broker. The choice of which is usually made at the outset of instructions from the client but until a considerable amount of research and investigation has taken place it is often difficult to know the prospects of success. The benefits of early expert evaluation should not be underestimated because to an expert practitioner there are very often clues as to the underlying reason for the rejection of cover, and the antidote, that are not otherwise evident.
Whilst the policy is the evidence of the contract, it does not tell the full the story about the underlying transaction. The process by which insurance is arranged can have a significant bearing on the arguments that can be advanced in the insurance dispute. Analysing the “audit trail” of the transactional process, can, with the insurance expert’s eye, lead to startling revelations helpful (or not) to the case against the underwriter or broker. Either way it is better to know, early.
Why are these cases so common and what do you think companies could do in order to reduce the risk of them occurring?
The most common reason for insurance dissatisfaction arises from underinsurance; the “sums insured”1 being, very often, considerably lower than the value at risk. The reason for that is at the root of the causes of insurance disputes, generally. It is the quality of dissemination by the policyholder or its agent (broker) of information “material to the risk”. It is a universal truism that buyers resent the purchase, the cost and the stress of dealing with insurance matters. There is, sadly, an overarching mistrust of insurance and this leads to the temptation to be economical with the truth about “the risk” at the time of proposing for cover. Insurers are of course well aware of this and so are inclined to rigorously examine the facts at the time of a claim to compare them with the facts disclosed, originally.
The new insurance Act 2015 goes a long way towards protecting the policyholder from the worst of the old, often unreasonable insurance practices, but the headline provision of the Act and the very essence of the contract is the Duty of Fair Presentation (of the Risk). This duty is described in the Act for the first time in the history of insurance and, ironically it can create more problems for the Proposer, than apparent at first sight. Expert insurance practitioners will usually know “the norms” of what is material or not in any given situation.
How has the insurance industry changed over the years? How has this affected your clients?
The insurance industry has changed beyond recognition from its state in the mid 1980s to 1990s when a large body of insurance-related case law emerged. Technology has replaced human capital to a large extent and so there is considerably less lifetime-career experience in the industry than there once was. Insurance, with the advent of modern technology became a “numbers game” where the algorithms of actuarial dissection of past history determines, to a large extent the insurance contract offerings and terms of today. So, when something of the insurance “does not work” there are fewer people to say what was intended. This creating new methods of evaluating insurance claims and claim disputes.
FCA Regulation of insurance has also helped, to some extent, in framing the boundaries for insurance contracts. The overarching principle that an insurance should not be mis-sold and should meet the buyer’s demands and needs gives rise to the question “what was the policy intended to do – which would meet the policyholders demands and needs”? The expert eye will notice when a policy interpretation cannot make sense in the absence of the test “could you have sold it if that term was understood by the policyholder to mean that”?
There are very early signs of insurance disputes arising under the provisions of the 2015 Act and it is already evident that the industry is struggling in getting to grips with the new law. Attention to detail by the expert is paramount.
Flaxmans Chairman Roger Flaxman
ACII, MAE, Chartered Insurance Practitioner, CEDR-accredited Mediator
34 Lime Street
London
EC3M 7AT
www.flaxmanpartners.co.uk
With more than 40 years’ experience in the insurance industry, Roger Flaxman, a member of the Academy of Experts and ACII Chartered Insurance Practitioner, has more than a decade’s experience serving as an expert witness in matters of insurance practice, duty of care and insurance market procedure.
Flaxmans are insurance advocates specialising in commercial and business insurance advice.
Flaxmans is highly regarded and recognised throughout the industry and our level of service and expertise is reflected in the considerable success rate for our clients. As professionals we charge fees for our services which invariably are covered through the successful claims outcome. Prior to embarking on a case we always ensure our clients are aware of the fees involved and the prospects of success and costs benefit ratio.
Our skills include insurance law and practice, insurance claims advocacy, claim negotiation, litigation support, mediation and management of distressed business risk and loss adjusting mediation and settlement.
As General Counsel, Susan Ols’ role is to provide industry-oriented advice and counsel on various corporate and commercial issues for Credit Union Central of Manitoba (CUCM) and CUCM related entities. She has a mandate to create, review and approve legal agreements, resolutions, by-laws and other documents to ensure CUCM and Manitoba credit union interests are appropriately represented and protected. Susan discusses credit unions: “As cooperatives, credit unions adhere to seven Co-operative Principles – statements that emphasize service, equality, respect, autonomy, community, democracy and education”, as well as the challenges she faces as General Counsel.
There are twice as many credit union locations in Manitoba as there are for other financial institutions; what challenges does this pose on your role as General Counsel?
Nearly half of Manitobans – over 600,000 – use a credit union for their financial needs. Manitoba credit unions are sophisticated, competitive financial cooperatives – each locally owned and democratically governed by its member owners. Today, Manitoba credit union total assets represent around $28.5 billion of the Manitoban economy – that represents growth of 120% from a decade ago.
The trend in the credit union industry today is fewer, larger credit unions. In 2006, there were 57 independent credit unions in Manitoba – at the time of writing, there were only 30. Ten years ago, only 3 credit unions had assets over 1 billion. Today, that number has more than doubled. This trend is expected to continue.
In this climate of accelerated growth, I provide guidance to Manitoba credit unions on matters of common concern, such as corporate governance, compliance, and regulatory requirements, both federal and provincial. I am in frequent contact with provincial regulators, including the Financial Institutions Regulation Branch (FIRB), an arm of the provincial government that oversees the legislative and regulatory framework of the credit union industry, and Deposit Guarantee Corporation of Manitoba (DGCM), a statutory body established under the Act to oversee credit union operations and performance, and guarantee member deposits.
I am also involved in the legal vetting of operational and policy manuals that CUCM maintains, as mandated by the Act, on behalf of credit unions. The manuals deal with various legislative and regulatory issues faced by credit unions in relation to, inter alia, Privacy, Foreign Tax Compliance, Anti-Spam Legislation, Anti-Money Laundering, and Common Reporting Standards. Compliance and risk management support are crucially important services that CUCM provides to credit unions. In consultation with other regional and provincial centrals, our team provides guidance to help credit unions comply with the extensive set of federal legislation and provincial standards.
How do you ensure you maintain the best outcome for clients, whilst adhering to the company’s needs?
As a creature of statute, CUCM’s purpose is defined by the Credit Unions and Caisses Populaires Act, which establishes our objectives and credit union expectations. In addition to managing credit union liquidity and credit granting procedures, we exist to provide top quality services for credit unions. Some services are those that are most effectively provided on a centralised basis, including educational, research, and advisory work. Others are custom solutions. We also do our utmost to promote sound management principles and operating procedures for the benefit of credit unions, while broadly promoting the organisation, development and best interests of credit unions in Manitoba.
What is the most challenging aspect of maintaining that balance? How do you overcome this?
Building and maintaining good working relationships is essential in this position, as is managing priorities and time. I try to acknowledge all incoming requests or queries, and provide a preliminary review of the matter in order to assign priority. I also consider or inquire into relevant timelines to ensure deadlines are met. If additional time is required to complete an assignment, I give notice as soon as possible. Providing regular progress reports helps reassure clients that their matters are being attended to in the event of unexpected delay.
What benefits do credit unions offer to businesses and corporations?
In terms of products and services, there is little difference between credit unions and other financial institutions. Like other financial institutions, credit unions are highly regulated, their capital requirements are stringent, and they are closely monitored by provincial and federal regulators for compliance with legislation and financial indicators.
Like other financial institutions, credit unions constantly try to balance traditional customer service, emerging technology, compliance, member-customer needs and profit. For some, profit is the deciding factor, and this is where credit unions differ, whether providing service to individuals or businesses and corporations: credit unions operate on the principle of ‘profit for service’, not ‘service for profit’.
Credit unions are profitable enterprises and all members are shareholders, so when credit unions plough profits back into their operations — to enhance electronic services, offer very competitive loan and savings rates and low fees — all members benefit, including business and corporate members.
After contributing to their own equity to meet regulatory requirements, supporting community groups and initiatives — and making enhancements to operations, products and services — credit unions return any profit that remains directly to members in the form of shares, rebates, and lower lending rates and higher deposit rates.
It’s a business model that has proven very successful in Manitoba, with its long co-operative tradition.
Credit unions also have a great deal of experience and success with Manitoba business.
Credit unions are the number one lender to small- and medium-sized business in Manitoba; no other financial institution even comes close – almost 50% of small businesses in Manitoba use a credit union as their primary financial institution. They are also safe and solid – every dollar on deposit at every credit union in Manitoba, and every dollar of interest earned, is guaranteed without limit by the Deposit Guarantee of Manitoba.
Credit unions have branches in over 100 communities throughout the province, thereby providing Manitobans substantially better physical access to high quality financial services and products than any other financial institution. In over one-half of those communities, a credit union is the only financial institution in town to serve local residents and business.
Are there any legal changes occurring in 2018 which will heavily impact your work; if not, are there any changes you are hoping for?
Throughout the course of 2017, CUCM participated in a number of working sessions of the Law Review Committee, members of which include representatives of the Financial Institutions Regulation Branch (FIRB) and Deposit Guarantee Corporation of Manitoba (DGCM).
The Committee was tasked with reviewing a series of proposals to update The Credit Unions and Caisses Populaires Act (Manitoba). The proposals were aimed at facilitating the transfer of supervisory authority of CUCM from the Office of the Superintendent of Financial Institutions (OSFI) to FIRB. The proposals also sought to accommodate a number of changes to the regulatory landscape within the Manitoba credit union system in relation to capital/liquidity requirements and governance. It is anticipated these proposals, once enacted into provincial legislation, will have a significant impact on the operations and governance of CUCM and Manitoba credit unions.
What impact has the country’s economic status had on your work, if any?
Canada has a stable economy, which fared reasonably well during the 2008 financial crisis. Nonetheless, the effect of the 2008 crisis has been to increase the degree of regulatory scrutiny applied to the financial services industry generally. The regulatory burden on credit unions, however, has been disproportionate given their asset size relative to other Canadian financial institutions. CUCM’s role is to help Manitoba credit unions navigate the increasingly complex regulatory labyrinth.
Susan Ols, BAH, LLB, LLM
General Counsel & Director, Legal Affairs
Credit Union Central of Manitoba Limited
+1 (204) 985-4815 I Susan.Ols@cucm.org
My name is Susan Ols and I am General Counsel and Director of Legal Affairs at Credit Union Central of Manitoba Limited (CUCM). Prior to arriving at CUCM, I acted as Crown Counsel for the federal Department of Justice, Canada. I’ve been fortunate to have had the opportunity to work as in-house counsel in both the public and private sector, in Europe and in Canada. I’ve found that many of the corporate compliance issues facing business today are increasingly transcending national borders.
I grew up in Winnipeg, Canada and studied at home and abroad. I completed both law degrees (LLB; LLM, Cantab) in England. I am a member of the Bar Council of England and Wales, the Manitoba Law Society and the Manitoba Bar Association.
CUCM is the trade association and service provider for the province’s 30 autonomous credit unions. CUCM was created by The Credit Unions and Caisses Populaires Act (Manitoba), and is mandated by the Act to manage liquidity reserves of credit unions (the Act requires credit unions to maintain prescribed levels), and to monitor credit union lending procedures. CUCM also provides common trade services to credit unions in areas such as corporate governance, government relations, representation and advocacy.
In addition to the above, CUCM provides services to credit unions in the areas of payment and settlement systems, treasury, human resources, research, communications, marketing, planning, lending, R & D, and business consulting.
Manitoba credit unions jointly own CUCM and representatives from six provincial Peer Groups sit on its board of directors. CUCM is financed through assessments and fee income derived through its operations.
Copenhagen is effortlessly chic and has so much to offer than any other capital in Europe. What better place to stay than a hotel that is 15 minutes from the airport and walking distance from all the must-see sights of one of Europe’s oldest cities. We promise you that The Andersen Hotel offers all things ‘Scandi cool’. The vibrancy of the hotel stretches out further than the bright and bold walls, with their warming hospitality and ‘happy hour’ filled with wine, The Andersen Hotel will truly make your Danish experience more authentic.
True to the Danish way, Copenhagen boasts more than harmonious hygge and contemporary style; the capital city is enriched with history and captivating architecture which truly makes it a must-see destination in Europe.
The fresh, crisp air is the perfect companion for the strolls down the harbour, whilst you admire and soak in all Copenhagen has to offer; from quaint, pastel painted houses to the intricate designs of Copenhagen’s Royal palaces, this is the city where history echoes within the walls whilst modern art whistles through the streets.
Below, we have listed only a small handful of the many places you can visit. The Andersen Hotel is a short five-minute walk from the main city train station, so whether you are in dire need of Dunkin Donuts, Danish pastries, or a quick dash to the best tourist hotspot, you know it is not too far to trek. You could easily begin your city tour the moment you land, with the Andersen being a mere 17-minute train journey away from the airport; so, let us not waste any time and begin…
Top five places to visit in Copenhagen:
Built 400 years ago by King Christian IV, the Rosenborg Slot (Castle) houses the crown jewels and showcases hundreds of years of royal history. This castle is not short on pomp and pageantry and reveals the grandeur lifestyle the King once lived. Travel back in time and admire the royal possessions and discover the odd peculiarities the nobles once indulged in.
Rosenborg is located in Kongens Haven (The King's Garden), which contains stunning rose gardens, manicured lawns and bushes, making it the perfect place to relax and enjoy lunch. relaxing during summer.
Distance from the Andersen Hotel: 11 minutes via public transport, or a short 25-minute walk.
Christianborg Palace lies on Slotsholmen (Castle Island) in the middle of Copenhagen. The Queen, the Danish parliament and the office of the Danish prime minister all operate from within the confines of the Palace, from exclusive dinners to welcoming foreign state leaders, you can discover the royal reception rooms. The icing on top of the cake, however, lies in the hands of the highest tower in the city; the magnificent panoramic views the Palace tower flaunts is worth viewing, as you will be able to admire the class Copenhagen offers.
Distance from the Andersen Hotel: 13 minutes via public transport, or a short 20-minute stroll.
Copenhagen has beautifully curved canals, which serve as buffer zones between many of the areas.
Nyhavn is a 17th-century waterfront and it does not disappoint. The picturesque canals come with soothing jazz from the local cafes, fresh, succulent fish and indulgent waffles and refreshing beers for you to soak up the modern Danish life. A trip on the canals is a great way to take a break, rehydrate and reenergise; at the end of the harbour is a theatre where you can enjoy Danish ballet, or stop by for a nice coffee on the deck.
Distance from the Andersen Hotel: 15 minutes via public transport, or a 30-minute walk.
If the quaint dollhouses exhibiting the childhoods of the past doesn’t draw you in, perhaps tracing Danish culture from the Middle Ages through to the present day will. Use this museum as your starting point for your Copenhagen journey, as it will have you yearning to explore the city even further. Showcasing mummies to cosplay, you could easily spend hours here, with or without your family.
Distance from the Andersen Hotel: 12 minutes via public transport or a quick 15-minute walk.
Of course, after all this sight-seeing good food is a must. Copenhagen boasts Michelin star restaurants, but the Mielcke & Hurtigkarl restaurant is a place where your taste buds will be set alight. If the gorgeous gardens don’t lure you in because you prefer the thrill of a surprise, enter the intimate dining area to be wined, dined on a secret menu; yes, that’s right…if you have trust issues, here is where you will test them and not be disappointed. This unique eating experience combines exquisite food with taste bud tingling wine in one of Copenhagen’s most beautiful settings, The Royal Horticultural Gardens, which date back to 1830. Within this milieu, all the senses are massaged at M&H. The decor is droll – a skilful intervention in its historic beauty. The outside is brought in, with the décor flaunting nature’s finest work with some of the most prominent artists, designers, and furniture that Denmark has formed in the last decade. They say that the devil is in the details, well, so is the divine.
And the details are what M&H do so well. The menu starts with a series of appetizers that open the palate and the mind, where you can soak in every little burst of flavour, from the floral elderflower complimenting caviar, right through to the sweet lime drizzled over fresh langoustine. The waiters make this an experience, rather than just ‘dinner’ and will proudly present each dish explaining the roots behind the zest each of your senses are tasting. Where it may be freshly grown herbs from the gardens outside, or personally picked (and shot!) pigeon* by the head chef, dining at M&H will leave you questioning if you really knew what fine dining entailed until now.
*Fear not if this scares you… the team at M&H are friendly, and I can assure you they will meet all your dining preferences and allergies.
Distance from the Andersen: 30-minute walk. I would personally recommend the walk up, where you can see the hustle and bustle of the city life, enjoy the shops on the stroll down and really soak in all Copenhagen has to offer. Each corner you turn you will be amazed by the impressive buildings, open space for cycling and the buzz of the Danish nightlife.
Being in the perfect location is not all the Andersen Hotel has to offer. Aside from the friendly smiles, seamless aesthetic settings, bikes you can rent to really blend in with the locals, and endless amounts of coffee, the best part is the Danish hospitality which you will truly experience here. After a long day of exploring the city, what better way to bid adieu to the retiring sun than happy hour; each evening the Andersen cracks open bottles of wine, complimentary for their guests, welcoming you to embrace conversations with others’ travelling from near and far. Tables scattered with wool so you can knit scarves for the homeless, to challenging a stranger to an intense game of chess, if you don’t take anything else from Copenhagen, you are sure to take away once in a lifetime stories and perhaps, new friends.
Price per night from £195 for the Wonderful room, including organic breakfast, Nespresso machine, Molton Brown toiletries, bath robe and slippers, air conditioning and WiFi
For some time now, the government has been aware of the link between innovation and economic growth. They have sought ways to reward those within industry and business for the role they play in promote efficiency and growth. Her Majesty’s Revenue and Customs (HMRC) has distributed over £14 billion in Research and Development tax credits since the turn of the last millennium, to encourage innovation and forward-thinking across the board.
How does this relate to manufacturing?
It is a commonly-held misconception that innovation takes place at the drawing board. In fact, much of it is born out as part of the manufacturing and production process. From the development of new handling and processing techniques, to the on-site development and testing of prototypes, manufacturing is a hot-bed of innovation. This is something that the government has come to recognise: of all industries to benefit from the current R&D tax incentive manufacturing is one of the fastest growing. R&D tax relief has been granted for such things as adapting existing processes to marry up with new legislation, as well as integrating new technology into existing manufacturing systems.
Are you eligible?
As indicated above, many manufacturing firms fail to apply for Research and Development tax credits from HMRC because they do not believe they will qualify. The regular and consistent innovations that they develop and promote on a daily basis are ignored because they see it as part of their job description, rather than the constant state of reinvention that it actually is.
Don’t miss out on your share of R&D tax relief
Often, it is the complexity of tax credit legislation, coupled with collating the large reams of data and evidence to satisfy HMRC, that causes manufacturing enterprises to think twice before applying for R&D tax relief. This is an area in which we can help, since we have noticed common threads in terms of innovation in manufacturing that hold true no matter which sub-section of the industry you company caters to.
How to claim tax relief for Research and Development
It is no longer the case (if ever it was) that R&D is confined to a research lab or an engineering bay. Certainly, such considerations have never been the criteria for government-backed R&D tax relief. This is hardly news for those within the manufacturing industry, who know that you innovate as much by doing, as by designing. In order to qualify for R&D tax credits for manufacturing, you must be able to show your innovative processes, and supply HMRC with such evidence as they require.
If you’re looking for a better understanding of R&D tax credits, and how they can impact upon your manufacturing business, give R&D Tax Solutions a call today on 0161 298 1010, to speak with a member of our friendly and professional team.
Fish, poultry, meat, dough, milk, cheese and eggs.
You might be thinking why we are talking about this. But, if you are in the food industry, you may have a fair idea of where we are going with this. They’re ingredients for your final products and they are your gateway to R&D tax credits and relief.
Since 2000 to 2015, £14bn in R&D tax credits was distributed to innovative companies by HMRC. This is because the government believes that innovative companies are responsible in part for the growth of the economy. Not only that, these companies should be rewarded because they are partially responsible for creating jobs and adopting more efficient processes of production in their pursuit of growth.
But where does food come in?
Food is one of these industries where new ingredients are created and new recipes constantly tried in order to achieve technical advances from food tastes, to the longevity of the food, to lowering costs of packaging processes.
Claim your share of the R&D tax credits
The food industry is one of the most untouched industries in terms of its potential for claiming R&D tax credits (see: research and development tax credit food). Doesn’t this sound like something that you already do? It can be as simple as experimentation of new flavours for cupcakes and full sized cakes at a bakery. As long as you meet HMRC’s criteria, you’re good for a claim. The tax incentives aren’t just for the larger businesses; smaller companies who make a successful claim can receive a deduction of 230% of their qualifying R&D costs.
Farming as part of the food manufacturing chain
While there are opportunities in the way that our foods are packaged and preserved in temperature controlled environments, there are also many tax relief opportunities for farmers. They may be eligible for R&D tax credits by experimenting with the way they rearing livestock for maximum healthy produce.
There are many opportunities for innovation in the food industry chain even if we don’t alter the natural balance by injecting harmful hormones into livestock.
Claiming R&D tax relief
The confines of a lab are no more a definite requirement to get research and development tax credits. But, you do have to clearly state your claim and provide necessary evidence to HMRC for your claim to be approved. At the end of the day, the good news is that R&D tax food companies do not need to be confined to a laboratory to get a helping hand from the government through an R&D Tax Credit.
To learn more or get started with your R&D tax credits applications and documentation, please visit us at R&D Tax Solutions or call our friendly team on 1016 298 1010.
To keep pace with business in an ever more competitive environment there is a rapid evolution from everything being bespoke, to commercial transactions being organised into a service continuum. Many commercial transactions follow the same pattern, and have the same structural framework. The ability to provide a service structure integrating business processes and legal service professionals, combined with technology, further automates the efficacy, effectiveness and cost efficiencies and also provides a real competitive business advantage. Additionally, corporations are demanding metrics driven delivery models, including SLA’s and service credits. These trends are increasing validated by the growing number of non-traditional legal providers including the big four accounting firms and boutique entries into the market.
Are legal services for procurement functions keeping pace with the rapid change in legal services?
Yes, absolutely. Procurement transactions represent the largest legal spend and highest volume of transactions in most organisations, consequently, the procurement function represents one of the greatest opportunities for these strategies in any corporation. Aside from all of the advantages mentioned above, the adoption of these strategies allows internal legal teams to focus on the most pressing and important transactions that require a higher-level of customisation, and additionally takes the more mundane tasks the desks of internal corporate legal teams thus providing greater job satisfaction. Generally, the trend has been to organise transactions into portfolios of recurring transactions, tactical transactions and highly strategic transactions. Process driven strategies can then be applied to the recurring transactions and to critical components of the tactical and strategic transactions.
Can you provide a case study of a client who has embraced the modern model for the delivery of procurement support services?
Ashe was initially engaged by Nike to develop a transactional platform that could handle thousands of transactions per year, which would require moving from its prior delivery model to an advance delivery model with the goal of increasing throughput. Nike’s requirements included: streamlined workflow, cost efficacy, SLA’s, metrics and continuous innovation. Ashe approached this challenge as a business problem versus a legal problem and provided Nike with a response that include structured workflow, new and innovative pricing models, unique SLA’s, and a variety of legal services at different price points. This initiative provided cost savings, reporting transparency, a much broader array of resources and increased efficiencies and the initiative was recognised at the highest levels within Nike. Additionally, this initiative was recognised as highly innovative by a host of commentators including the Financial Times, Association of Corporate Council and others. Robert Reynolds was individually recognised as one of the most innovative lawyers in the legal sector by the Financial Times and others for this initiative and others over the last several years.
What are the challenges of getting companies to move from the traditional model to the modern model?
Many corporate legal departments have become accustomed over many years to the hours times rates model offer by traditional law firms. Additionally, they often have strong allegiances to lawyers at the firms that have served them well for years, and have a depth of institutional knowledge. Additionally, the corporate law department has a significant legal budget for sourcing outside legal services that is not easily susceptible to challenge. Unless there is a significant business initiative to change, there is limited incentive to change. By contrast, the legal function doesn’t have a large budget for operating infrastructure, technology or process change. All of these characteristics create impediments for law departments to shift from the traditional model to these new models.
What are the challenges for a traditional law firm to adopt these strategies?
Traditional law firms, especially in the United States and other western countries, have built a business model over the last several decades that evolves around hours times rates economics and routine distribution of all profit on a regular cadence. Additionally, traditional law firms are typically managed by the more senior partners in the firm that are skilled lawyers that have little incentive to transition from the traditional business model and have less formal experience and training for building businesses. All of these attributes make it challenging for traditional law firms to commit to significant investment process development, technology implementation and the staff required for the modern legal provider. This proclivity is especially true with new strategies that tend to offer efficiencies that will drive down revenue, in particular service portfolios resulting in lost revenues.
What key attributes should you look for when choosing a Modern Legal Provider?
The best of the modern legal providers offers the combination of full legal service capabilities, process engineering, automated delivery and management consultancy. Additionally, they embrace technology and are adept at rapid change including the ability to easily to ramp up or ramp down in real-time to meet the demands of the market. They have commitment to outputs versus inputs and performance driven pricing. Additionally, they have the ability to provide global service capabilities.
Contact info:
Robert Reynolds - CEO
Denise Barnes - CBO
www.ashelegalgroup.com
Recognised as one of the world's best and most innovative lawyers, Robert focuses on sourcing and technology implementation, mission-critical corporate strategic initiatives, global compliance programmes, and other complex and high profile activities.
With a particular concentration on IT procurement, Robert's sourcing experience ranges from solving large-scale tactical procurement and outsourcing issues and to managing the business process service procurement arrangements and mission-critical data, IP, and other high-value portfolios of intangible assets.
We are a Corporate Legal Platform dedicated to streamlining the delivery of structured legal services to corporate clients by a community of carefully sourced legal service providers.
And we provide lifecycle management for the legal portfolio assets that result from our services.
Ronaldo Apelbaum speaks to Lawyer Monthly all about tax in Brazil; where the country needs to focus on certain tax issues, Ronaldo reassures us that movements are starting to address such problems, and touches on what companies should do to avoid causing tax issues in the future.
How has the business sector progressed over the past few years in Brazil?
In 1994, when Brazilian developed a new economic policy that put under control high inflation and brought stability to our currency, our gross domestic product (GDP) grew a lot on the following two decades. Also, we opened our market for multinationals and billions of dollars were invested here. Our agriculture, services and industries became relevant. On the other hand, this prosperity was not reverted in real social, human and education development. Moreover, our authorities and policymakers did not care about tax, labor and retirement reforms that were, and still are, extremely necessary for Brazil, too. Beginning in 2014, when our economy started to decrease, we perceived that we were not prepared for bad periods. Due to this, we have been suffering a lot with high rates of unemployment and lack of resources for new investments.
As I mentioned before, our agriculture is very relevant, modern and represents - with no doubt - our most relevant economic sector. New energy sources, finance and IT services are also relevant and will be responsible for reverting this bad scenario in 2018. Other sectors still depend a lot on political changes and reforms.
Do you think there could be any changes related to tax issues which could further allow Brazil to progress?
In the last 20 years, tax reform has become a daily issue in our challenges and people talk a lot and invest time on that. We have around 90 taxes in Brazil some of them need to be paid on the same basis, same facts. For instance, if a Brazilian company import services, they will have to pay withholding income tax, CIDE, ISS, PIS, COFINS and IOF on top of that. Usually, around the world, only withholding income tax shall be paid, so we ask why in Brazil do we need to pay six different taxes? This does not make much sense, but unfortunately that’s not the only issue.
The big issue, in my opinion, is to eliminate our heavy bureaucracy and to definitively change the relationship between the state and the citizens. Tax authorities and taxpayers act as if they are big enemies. Like Tom & Jerry, one is always teasing the other. As a result, total tax contingencies in Brazil under discussion is around USD 1 - 2 trillion (around 80% of BR GDP) and a tax discussion may last around 20 years to be finalized. And more: if you are a good taxpayer and make a single mistake in the tax calculation, you may receive a tax assessment with huge fines as if you were the worst taxpayer in the world. The result is that now several people and companies, especially the medium-sized ones, only pay taxes when they are forced to do so or when they receive big and openhanded discounts. Here in Sao Paulo State, where APGI Advogados is located, tax authorities are working in a new legislation that allows different treatment for good and bad taxpayers.
Therefore, reducing the rates and amount of taxes may help, but what we really need is to change the way people, companies and authorities behave to get what we really want for the future of Brazil. We need to care more about the country and less about immediate gains and losses.
What more do you think the government could do to gain the most out of taxpayer’s money, without having to increase tax prices?
Increasing tax prices and rates is impossible in Brazil. People are tired of paying taxes without receiving good results. Our taxes represent 37% of our GDP, but the middle-class families pay for the biggest part. We have more that USD 1 trillion in taxes under litigation and some economic studies shows that we have around USD 200 Billion of tax evasion every year. Brazil does not need to increase taxes, but needs to collect the ones that already exist! It’s not fair that a big company may delay tax payments for 15, 20 years and, at the end of the day, receive huge discounts in special tax amnesty programs.
One other relevant issue is related to tax breaks. Several institutions in Brazil do not pay tax because the Government believe that would not survive without these incentives (churches, universities, companies located in the Amazon Rain Forest, are some examples). Some types of business pay much more than other ones, and we also need to equalize that. Great news here is that this is now becoming a big discussion in Brazil…let’s see if we can break political resistance and make a deep change on this point.
What is the best method for international corporations to take in regard to tax management?
I have worked for large multinational companies in Brazil and Latin America, like Santander, Hewlett-Packard and Capgemini, managing tax departments, and always dealt with desperate reactions of my leaders in USA and Europe about the Brazilian taxation system; I know that it can be hard to deal with. The first thing, and the most important, is to understand that Brazil is unique. Managing taxes in Brazil is much more about risks and cultural issues.
For instance, Brazil wants to be part of OECD, but doesn’t accept the OECD rules for transfer pricing calculation. The base erosion and profit shifting (BEPS) initiative will be applied here only if there are no reduction on taxes collected by Brazil.
In the recent past, we used to have tax departments with more than 100 people in Brazil. However, nowadays, Tax IT is dominating compliance issues and creating a new environment for such departments. To be really safe about doing business in Brazil, international corporations need to have a local manager or consultant that is very experienced and able to deal with tax authorities, lawyers and risk management.
On the other hand, for tax calculation, we have now great systems and software created by local companies that can make your tax compliance without scaring CFOs. Finally, other functions like reconciliation and tax accounting can de done abroad, in countries where employees are less expensive when compared to Brazil. We have seen a lot of work being transferred to Mexico, Costa Rica, Philippines, India or Central Europe.
Is there anything else you would like to add?
Of course, when we talk about tax environment in Brazil, it’s hard to show a positive view of our facts. But our country has a lot of good aspects that attracts a lot of business and international companies: we have more than 200 million people that want to become part of a consumer market. The state is still responsible here for providing basic education, health and other bare necessities to people. But this is changing, and more and more market and private companies will be responsible for giving the essentials to people.
What’s important about Brazil is to not ignore the risks from the very first day you start your business here. Tax, Labour, Regulatory rules, everything is so complex and does not always make sense to the people that are from developed regions. Local and experienced tax and legal professionals are really essential for successful business in Brazil, and a lot of international companies are making tons of dividends for shareholders, so why not come to Brazil?
Ronaldo Apelbaum
Graduated from São Paulo University Law School (USP) and a specialist in Tax Law, Ronaldo Apelbaum has practiced for 20 years as consultant and tax manager in Brazil and Latin America for multinational companies such as KPMG, Banco Santander, Hewlett-Packard and Capgemini. He was appointed as Vice-President of the 1st Section of the CARF (Federal Administrative Court of Appeals) during the period 2015-2017.
Focused in consulting, tax planning, in the administrative and judicial tax litigation, as well as in the advising about the taxation of individuals and families in Brazil and abroad.
APGI Advogados is a law firm based on the 20 years of experience of its partners in the advice to legal and financial departments of important national and multinational companies. Our firm is associated to the CAMARBRA - Argentinian & Brazilian Chamber of Commerce and official law firm of the Trade Council of Denmark in Brazil.
We practice in the main areas of the corporate, contractual and tax laws. For individuals, we provide advice in the structuring and protection of their business and in succession law issues. We also practice family law, acting in the interests of minors, couples and their relations, including homosexual relationships.
Ben Brindle, Director at Risk Capital Advisors talks to Lawyer Monthly about different types of transactional risk insurance and how it helps to facilitate M&A deals and why warranty and indemnity insurance is important.
What makes Risk Capital Advisors (RCA) unique in the M&A insurance market and what experience do you bring to the organisation?
RCA is a specialist insurance broker focused solely on transactional risk insurance for M&A. What differentiates RCA from other M&A insurance brokers is our wide-ranging deal experience and insurance expertise. RCA has an unparalleled understanding of, and a relationship with, the global underwriters and insurance markets who specialise in transactional risk insurance and it is this unique position that enables RCA to secure exceptional outcomes for its clients.
Every insurance placement that we work on is led by one of our seven directors, who between them have more than 100 years of experience in M&A insurance. RCA has worked on deals of all sizes, across all sectors, and with many different dynamics and jurisdictions. We have also worked on some of the higher-profile claims in the M&A insurance market. We have offices in London, Hong Kong, Melbourne, Sydney and Melbourne and have secured insurance for more than 400 transactions across over 30 countries in Europe, Asia Pacific and Africa.
Having worked in the M&A insurance market since 2002, there are very few situations that the team has not seen before in the context of a deal.
Tell us about transactional risk insurance and how it can facilitate M&A deals.
Transactional risk insurance can take a number of different forms.
W&I insurance
Warranty and indemnity (W&I) insurance is the best known and most widely utilised of these solutions and is now almost commonplace on private market M&A transactions in the Europe, Australia, New Zealand and the US.
W&I insurance transfers the potential liability created by the warranties and indemnities in a sale agreement to an insurer. It provides cover for the insured party for financial loss arising from a claim for breach of an insured warranty or indemnity. This insurance is a cost-effective alternative to the traditional means of addressing transaction risks such as purchase price adjustments, escrows, hold-backs or parent company/bank guarantees.
Tax liability insurance
This type of insurance provides an effective method of enabling a taxpayer to either reduce or completely eliminate financial loss arising from the tax treatment of a particular transaction, investment or other activity in circumstances where the legal conclusions underlying the tax treatment may be subject to challenge by the relevant tax authority.
The policy is crafted to cover the specific financial exposure of the insured in the event of an unfavourable determination by a tax authority, including:
The popularity of tax liability insurance has grown in recent years, both the use of the product by a party to an M&A transaction and as a stand-alone solution to transfer tax-related risk from a company’s books to an insurance provider.
Environmental liability insurance
The key feature of this type of policy is the provision of long-term protection against identified environmental risks as well as unknown sudden, accidental, gradual and historical pollution liabilities that have not been identified by the parties during an M&A transaction.
Cover under the policy typically includes the following:
Like W&I insurance, environmental liability insurance can be taken out by either party to a transaction and is a cost-effective and elegant solution to ring-fence any future financial exposure related to environmental risks.
Contingent liability insurance
These policies are designed to cover a particular financial exposure of the insured in the event of an adverse outcome in the resolution of the contingent liability, including:
The key feature of this product is that the insured can transfer the risk of actual or potential contingent claims to an insurance policy, but it can also release potential opportunities for sale or acquisition that might be precluded by a particular dispute or risk.
The policy can be tailored to the needs of the insured, regardless of the subject matter or jurisdiction and the type of insurance cover can range from something as simple as a breach of a supply contract or dispute with an employee through to highly complicated intellectual property or product liability litigation.
Who uses W&I insurance on deals?
Any party to a private market M&A transaction can take advantage of W&I insurance for their deal, whether they are the buyer or seller of the target asset or company as the insurance policy can be taken out for the benefit of either side of the transaction.
Users of the product include corporates, real estate, infrastructure and private equity funds. The transactions that we have secured insurance for vary in size from several million pounds to several billion. It is also common for sellers to make W&I insurance into a deal by making it the recourse for a buyer for breach of warranty claim that would otherwise brought against the sellers.
W&I insurance can be used on a wide variety of transactions, including the sale of shares, single or multiple asset sales as well as entire portfolios. The product can be utilised in competitive auction processes or proprietary deals and the geographic appetite of many W&I insurers is wide-ranging.
Why take out W&I Insurance?
The reasons why parties of a deal might take out W&I insurance are many and varied. For example, it may be important for a seller to achieve a “clean exit” following completion of a transaction. The use of a W&I policy can enable real estate, infrastructure and private equity sellers to close their funds after the disposal of the target without the need to provision for future breach of warranty and indemnity claims.
Another motivation for a buyer to take out W&I insurance is to ensure harmony amongst management in the event of claims for breach of warranty. For instance, if some or all of the selling management of a target is staying on with the company post-sale, and a breach of warranty claim arises after completion, the attempted resolution of that claim could lead to conflict. Where recovery is available under a W&I policy, this potential conflict is effectively removed and the business relationship between management of the target remains intact.
In recent years, there has also been a significant increase in the use of W&I insurance in the context of auction processes, where multiple bidders are vying for the same target. Prospective buyers can reduce or eliminate the seller’s liability for breach of warranty and indemnity claims by procuring a buy-side W&I insurance policy as part of the transaction and make themselves a more attractive bidder by doing so.
Perhaps the most compelling reason why W&I insurance is so popular is the fact the pricing, available capacity and policy terms are the best they have ever been, and insurers are increasingly flexible in their approach to deals meaning that there has never been a better time for buyers of W&I insurance to take advantage of this versatile product.
Ben Brindle
Director
1 King Street, London, EC2V 8AU, United Kingdom
www.riskcapitaladvisors.com
Ben spent almost 12 years with AIG (in London, Paris and Sydney), 9 of which were spent in the M&A Insurance Group. Ben also managed the AIG London Commercial management liability team, responsible for underwriting D&O, Pension Trustee, and Public Offering insurance. Before AIG Ben was a lawyer at Nabarro. Ben established the London office of RCA in 2014 and is regarded as one of the most experienced individuals in the Global M&A insurance market.
Founded in Australia in 2011, and with offices subsequently opened in London and Hong Kong, RCA is a leading global M&A insurance broker. We are a highly-experienced and hands-on team, providing expert, technical advice on all aspects of M&A insurance.
Vira Kammee is a leading litigator with a broad practice encompassing criminal, civil, administrative, bankruptcy and business re-organisation, corporate, banking & finance, as well as real estate development and construction for various corporate clients. He speaks to Lawyer Monthly about how he is impacted the legal industry in Thailand.
You have set precedents for The Supreme Court of Thailand; can you give an example? How did you prepare for this?
I have two examples as follows:
1. “Snoopy” litigation on the issue of copyright ownership. Copyright of “Snoopy” was not registered in Thailand but was registered in the USA. Under the Thai law then, registration of copyright materials was not available. The task then was to see how to rely on the trademark registration of “Snoopy” and filing a trademark infringement and to use the outcome of the trademark infringement to support the copyright dispute.At the first instance, the court delivered a decision in favour of our client and subsequently the decision was taken up to the Court of Appeal, where the court initially declined to hear the case on the grounds that the issue was double jeopardy. The court reversed the appeal court decision and upheld the first instance court on the ground that the subject matter was different: one in the matter of trademark infringement and the other was in relation to the copyright. The final outcome was in favour of our client.
2. In customs: the ‘fair market value’ issue, where an import duty was imposed on the ‘genuine’ spare part and the ‘pseudo’, which the customs official appraised that the ‘fair market value’ of the genuine and pseudo to be of the same price/value.
Often these situations are fairly new precedents in Thailand especially when it is concerning foreign clients. With laws in certain jurisdictions are advanced and they lodge a trial in Thailand, there is a challenging balance to be drawn from what is law in certain jurisdictions and the lack or non-existence of such laws in Thailand. It is a difficult balance but has been achieved in the above two matters discussed.
What are common reasons behind litigation for company reorganisations and how would you advise companies to avoid this?
A good understanding of the nature of the business is a fundamental element in reorganisation matters. It is not merely a matter of litigation but considering the time and not to mention the amount of money involved in a litigation process, it is important to ensure the route chosen is one that is beneficial for the client. A balance must be drawn from the counselling and advocacy.
As a frequent guest speaker at conferences, what do you think are current important messages to get across to others in your profession?
The legal profession is one that must be taken seriously. As lawyers, we must have the mind set on the client’s interest at heart. In doing so we must take the time to understand the client’s needs and what is the best possible cause of action available to them. A balance must be drawn between remedy and preventive measures. A mutual agreement is sometimes a path to be taken to ensure the client has better and quicker outcome of a dispute.
A balance must be drawn between real life and the rule of law on a fair and equitable treatment between the parties involved as always. The evolving of humans in a very capitalist environment needs a good set of rule of law to bring a daily work life balance throughout the paths of legal profession.
Is there anything else you would like to add?
As lawyers it is my strong belief that we must always adhere to the Legal professional ethics. Having these strong codes entrenched in our legal profession ethics code ensures that we act professionally and always strive to deliver the best service to our client. That is our primary duty to our clients.
Vira Kammee
E-mail: vira@siamcitylaw.com
Tel: +66 (0) 2 6766667-8
www.siamcitylaw.com
Over more than three decades of practice, Vira Kammee has advocated on matters such as labour, administrative, intellectual property, civil and criminal laws. He appears frequently in the Court of Justice and the Administrative Court as lead counsel, and he has represented many local and foreign institutions in corporate and commercial dispute resolution matters. In addition to practicing law, Vira has gained considerable experience in teaching law students and supervising lawyers of the firm. Vira combines dispute work with advisory work in relation to very complex real estate transactions. With vast experience in his field, Vira is often invited as a speaker at conferences, both in Thailand and abroad, in the areas of business reorganisation relating to cross-border joint venture transactions; compliance with the Foreign Business Act; as well as real estate and dispute resolution.
SCL Law Group was formed in 2005 by a group of highly talented and energetic lawyers with a wealth of knowledge, experience and commitment to serving clients.
