Understand Your Rights. Solve Your Legal Problems
ESG and sustainability consultancy ERM and a number of law firms have assisted the Itago IV fund in its acquisition of a controlling interest in Operamed via a leveraged buyout. Operamed is a major player in the Italian and international markets for its design and installation of modular outdoor and indoor solutions in the healthcare sector. Among its other services, Operamed designs, supplies and installs turnkey prefabrication systems for critical areas in hospitals, such as operating theatres, intensive care units, diagnostic areas, laboratories and wards.
ERM advised Itago on ESG due diligence with a team led by partner Giovanni Aquaro. Itago was also advised by SLT Strategy Legal Tax on financial and tax due diligence and the structuring of the transaction, by Goetz & Partners on business due diligence and by Ethica Group on financial matters. The sellers, who retain a minority stake in the company, were advised by Gianni & Origoni on legal matters and by BDD Advisory on financial matters.
The operation was financed by Banco BPM, assisted by Orrick.
Our ESG due diligence work on Operamed focused on understanding the key elements, or material topics, that could represent the main ESG (Environmental, Social and Governance) risks and opportunities for the company. Considering the small size of Operamed, the due diligence work prioritised topics able to generate business value for the company, thus contributing to its sustainability performance, business results and ability to respond to external pressures (e.g. from regulators, clients, competitors, etc.). To frame the analysis within the evolving ESG scenario, we performed a review of current sector’s trends. As a result, we advised Operamed on the next actions to take in order to best prepare for future challenges and leverage linked opportunities.
The main issue arising in transactions involving small and medium sized companies is the lack of a structured data collection and monitoring system. During the due diligence work, it is crucial to understand which data are collected and reported, what just needs to be collected in a more standard and efficient way and whether a real data gap exists. As risks related to lack of information exist (e.g. difficulties in monitoring trends, lack of basis to define improvement targets, etc.), the company can minimise them by defining internal responsibilities in charge of structuring a data collection system, gathering and monitoring information and reporting them back to the investors.
Acquiring a majority stake in a company represents a great chance for a private equity house to make a strong impact on its strategy, directly supporting the improvement of its ESG aspects. Being a majority stakeholder, the firm can convey to its portfolio companies the sustainability commitments that are part of its purpose and achieve the target that have been set at the company management level.
Roca Junyent counselled listed US multinational Brunswick Corp on its acquisition of Fanautic Club, one of the largest boat clubs in Europe with 23 locations in major coastal cities and tourist centres in Spain. Freedom Boat Club, the world’s largest boat club operator and a division of Brunswick Corporation, announced the acquisition of Fanautic. This acquisition accelerates Freedom’s growth in Europe and marks the third European country home to Freedom Boat Club locations, following France and the United Kingdom. Six of Fanautic’s 23 sites will be owned and operated as corporate locations, while the remaining 17 will continue to be owned and operated by franchisees.
Jason Worthy, Vice President of Boating Services, EMEA, stated that the acquisition would allow Freedom to continue its growth across Europe. “Expanding our presence across tier-one European markets is consistent with the aggressive shared-access growth plans that our leadership team outlined during Brunswick’s recent Investor Day presentation,” he said.
The Roca Junyent team comprised partner Xavier Costa and associate Carla Munt.
Our legal team advised Brunswick Corp’s legal, business and financial teams during the acquisition of the business of Fanautic Club and its operations on over 23 bases in the Spanish Coast. We were involved from early stages of the negotiation process with Fanautic until closing and continued to advise the client following closing.
We provided a multidisciplinary, multilingual team ready to cope with the technical and legal needs of the client and the transaction. Moreover, as we always seek to, we took due care in listening carefully to the client in order to understand well its goals, trying to ensure the client would feel duly advised, informed and comfortable during the whole process. We adapted the requirements of the client to the nature of the target to ensure we would be contributing to a successful completion of the deal.
From a pure technical perspective, we advised the client in Corporate, M&A, Employment, Regulatory, Data Protection, Litigation, Contractual, Commercial, Franchise, Insurance, Real Estate and IP matters.
Having had the chance to meet and work with the people at Brunswick and having experienced first-hand their high level of commitment, readiness and willingness to expand their boat club division in Europe, I have little doubts this will turn into a very successful story for everyone. Brunswick have spent decades defining, creating, and innovating the future of recreational boating. The implementation of their boat club division in Europe is great news for all sea lovers, as the quality boating they offer will be ready and accessible for everyone.
New York-based Steven Holl Architects has completed negotiations with the City of Ostrava for a design contract for the construction of a modern concert hall. CÍSAŘ, ČEŠKA, SMUTNÝ, law firm advised the city authorities, while VGD Legal advised Steven Holl Architects.
CÍSAŘ, ČEŠKA, SMUTNÝ, law firm team consisted of three leading members: Jaromír Císař (strategic consulting), Martin Krajčovič (contract law) and Milan Kučera (public procurement law). VGD Legal’s team was led by Robert Musil.
Can you tell us more about your team’s involvement with the negotiations?
Jaromír Císař: The negotiations regarding the contract with Steven Holl Architects lasted for over a year, because both parties had vastly different views on the terms of collaboration. We also encountered big differences between Czech and American legislation. The aim was to find common ground between them and, as a result, a common language between the two sides. Of course, you cannot do without mutual compromises, and it was not only these that both legal teams worked hard on.
What expertise did your team bring to the deal?
Martin Krajčovič: Our expertise was absolutely essential, because the City of Ostrava has not had much experience with preparing contract terms based on an architectural competition, moreover with a foreign partner. During the contract negotiations, we had to make use of our previous experience and also become involved in consultations concerning purely technical matters as well. In short, we had to make sure that no matter the difficulties the project of this scope would undoubtably encounter, the contractual mechanisms, at least in general terms, would take them into account and the project execution would not be unnecessarily hindered.
Milan Kučera: Additionally, we had to capture all the fine details of the construction specifics of the project and give form to them in the language of the contract. At the same time, we had to be sure that there would be no problems with their subsequent use, especially in face of very strict public procurement legislation. Our aim was to achieve maximum flexibility and keeping the administrative burden to a minimum for both parties.
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How did your team ensure that the deal was suitable for the Ostrava city authorities?
Martin Krajčovič: Communication with the client was an absolutely key aspect. We had to ensure that the contract between the City of Ostrava and Steven Holl Architects would be objectively balanced, but also that it would respect the existing practices and procedures of the city administration. For example, we had to persuade our client that practical private law processes need not conflict with formal public sector processes.
What factors need to be considered when negotiating on a large urban development like this?
Jaromír Císař: In particular, sustainability and timelessness, which are closely related qualities. It is necessary to remember that the last full-fledged concert hall in the Czech Republic that was completed was the Prague Rudolfinum in 1885. The concert hall will undoubtedly redefine the architectural character of Ostrava’s city centre, and will do so for many years to come. Therefore, it is essential that the project is realised using modern and sustainable technologies. The overall goal is to make the building a cultural heritage of the city for future generations.
Did you encounter any challenges during the negotiations? If so, how did you overcome them?
Milan Kučera: The interests of the city of Ostrava were a priority for us from the very beginning. The contract had to be concluded as soon as possible so that Steven Holl Architects could start the design work. One of the biggest challenges was to ensure that the parties agreed on the parameters of cooperation at least for the initial phase so that the project could start. In the end, we found a way through by entering into two separate contracts. This allowed work to begin on the preparation of the construction study, while at the same time giving both parties plenty of room to negotiate the terms and conditions for the implementation of the follow-up cooperation.
What impact do you expect this deal to have on Ostrava as a city?
Jaromír Císař: The implementation of this project will significantly contribute to the further development of the city of Ostrava and the entire region. The city of Ostrava will thus become one of the cultural centres not only of the Czech Republic, but thanks to its geographical position it will certainly have an overlap with neighbouring countries. It is therefore not just a cultural project, but a truly developmental one, which will undoubtedly have a positive impact on the entire region.
How does this deal fit in the profile of your law firm?
Jaromír Císař: It’s a perfect fit. For over 28 years we have handled a wide range of cases and assembled a team composed of experts in various areas of law and industries of our clients. A project like this is immensely valuable to us. I consider it to be one of the flagship projects of our work that perfectly represents who we are. It allows us to contribute to the cultivation of public space at large and also the cultural scene, which is an area we have long supported through our endowment fund Bohemian Heritage Fund that brought together many enthusiastic private sponsors of art and culture and successfully supported many initiatives.
Each member of the Social Mobility Advocates has had a non-traditional path to the Bar, coming from working-class or low-income households, attending a state school and non-Oxbridge universities, and working to fund their education and training. None of the Advocates had prior links to the Bar, and many faced various other challenges along their paths to becoming barristers.
The Advocates represent the incredible breadth of experience at the Bar and they aim to use this understanding to inspire a new generation of barristers from a wide variety of social backgrounds. The new Advocates are:
Derek Sweeting QC, Chair of the Bar, said: “At the Bar Council, we believe that social mobility is an integral part of creating a modern Bar. It is crucial that barristers from all walks of life feel welcome in the profession, regardless of background. Visibility plays a vital role in this – highlighting the diverse stories of our colleagues at the Bar is a powerful way of showing prospective barristers that there is no one way to sound, look or act like a barrister.
“That is why I am honoured to announce the launch of our new group of #IAmTheBar advocates. Selected from diverse backgrounds across England and Wales, our Social Mobility Advocates represent the best and brightest of the Bar. Although each of their stories is unique, one thing remains constant: a determination to make their voices heard. I look forward to seeing how they use this drive to inspire and encourage potential barristers in the coming months.”
In the coming week, social mobility stories are being highlighted on the Bar Council’s Twitter.
For companies looking to improve brand recognition, connect with new target markets and boost revenues, sponsoring an influential athlete can be an alluring opportunity.
The core purpose of sponsorship is for the sponsor to benefit from a positive brand association. In recent times many sponsors have gone beyond merely using the endorser as a model for displaying their logo, instead aiming to closely align themselves with the competition, team or athlete they are sponsoring in a multitude of ways.
When a sponsorship deal goes well, the potential rewards for the sponsor can be vast, but agreeing to a deal that goes poorly can be particularly damaging if it leads to a large amount of adverse publicity. Because sponsors depend upon the performance and image of the sportsperson they are endorsing, their conduct both on and off the pitch – including on social media – can have a heavy bearing on the potential return on investment.
The rapid growth of social media over the past decade and its reactive nature means it is more crucial than ever for would-be sponsors to be on the lookout for their new sporting ambassador to ensure they carry out due diligence before any contracts are signed.
Here, we explore why these steps are so critical, and explain what brands can do to limit the potential risks of agreeing a bad sponsorship deal.
Agreeing to a deal that goes poorly can be particularly damaging if it leads to a large amount of adverse publicity.
Social media provides a platform for sportspeople to share their thoughts and views with millions of people around the world and, while analysing their social media activity can be a lengthy process for potential sponsors, it is a necessary one. Vetting a potential ambassador’s social media accounts could unveil comments and views that do not reflect the morals and values of the sponsor, and the negative publicity that this could result in may severely damage the brand’s reputation.
As deals with the most sought-after stars can often cost millions to sign, ensuring that these checks are made can provide a vital means of safeguarding the investment, and those brands that choose to align with an individual with a chequered social media history run a greater risk of seeing the deal go sour and their revenues decline as a result.
There have been many instances in which athletes have lost their sponsorship because of their social media activity, though some have received considerably more press attention than others. Barcelona forward Antoine Griezmann, for example, had his contract with Japanese video games developer Konami revoked when a Snapchat video from 2019 resurfaced in which he appeared to mock Asian hotel staff.
More recently, bowler Ollie Robinson was suspended by the England and Wales Cricket Board [ECB] from international cricket duties as a result of historic tweets he had made containing racist and sexist overtones.
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This in turn called attention to other controversial tweets posted by fellow players, prompting the ECB to announce its intention of carrying out a social media review “to address any historical issues, remind individuals of their personal responsibilities going forward, and help them learn lessons along the way.”
Other notable cases include Australian rugby league player Israel Folau, who was dropped by sponsor Asics in 2019 following a string of homophobic social media posts, and Olympic gold medal swimmer Stephanie Rice, who was relieved from her posts as a Jaguar spokesperson in light of a homophobic tweet she posted after beating South Africa in a tournament. In each case, the sponsor has been eager to distance itself from the media fallout as a means of reducing the damage to their brand.
By remaining in partnership with the endorser in question, the sponsor is at risk of the public coming to associate the actions of the individual with the values of their brand, and with social media backlashes having become the norm, firms must be extra vigilant that they are in a position of strength for when things go awry.
Besides ensuring that due diligence on social media is conducted, firms must formalise sponsorship agreements in writing, addressing all the relevant terms and conditions, thereby protecting the sponsor’s interests, providing certainty, and minimising the risk of a dispute.
Given the huge implications that some incorrect wording in a contract can have, it is sensible to have a qualified sports lawyer review contracts to help mitigate any risks and ensure that agreements contain appropriate ‘morals clauses’.
Besides ensuring that due diligence on social media is conducted, firms must formalise sponsorship agreements in writing.
A morals or morality clause is a provision within a contract which holds a party to a certain behavioural standard. The purpose of a morality clause is to manage or guarantee the image of one party meets the expectations of another, and it gives sponsors the right to terminate the deal in the event that the endorser engages in conduct that might bring their brand into disrepute and negatively impact their image, goodwill and reputation. Such conduct would include attracting controversy on social media and the clause would allow sponsors to sever ties straight away to limit any reputational and financial damage.
In the age of social media, however, there are challenges when it comes to enforcing a morals clause. For example, it can be difficult to measure brand diminution and to pinpoint a particular tweet or post as the cause. It can also be difficult to prove that a sportsperson did in fact write the controversial tweet or post – complicated by instances in which athletes have a third party composing their posts or otherwise overseeing their social media accounts.
Another problem is that any investigation of an individual’s posts is constrained by the privacy settings applied to their account. Without explicit consent being given for their private accounts to be viewed, it is unlikely that brands will get a full picture of a person’s activity.
In such instances, it can be useful to give particular attention to a subject’s ‘likes’ or ‘retweets’, as these can often provide an insight into their views and whether they are likely to be in accordance with those of the sponsor.
Without explicit consent being given for their private accounts to be viewed, it is unlikely that brands will get a full picture of a person’s activity.
Given all the complexities of vetting an individual’s online activity, sponsors are well advised to work with a lawyer to incorporate a specific reference to communications using social media.
In the sports industry, sponsorship is huge business and, in general, sponsorships are seen as a mutually beneficial relationship for both sponsor and endorser. However, with the increasing recognition of social media’s importance, addressing an athlete’s activities on platforms like Twitter and Facebook in the context of his or her contractual obligations has become a necessity, and there is a very real risk of things going wrong for sponsors if they fail to do their due diligence.
If brands wish to mitigate the risks of forming a partnership that could damage their reputation and revenues, the importance of carrying out social media checks and ensuring contracts are watertight cannot be overlooked.
David Winnie is a senior associate and head of the Sports team at Blaser Mills Law.
Blaser Mills Law
Address: 107 Cheapside, London EC2V 6DN
Telephone: +44 020 7397 3744
Email: dpw@blasermills.co.uk
Blaser Mills Law is a full-service law firm offering a comprehensive range of legal services to businesses and private individuals. The firm acts for blue-chip companies as well as SMEs, entrepreneurs and not-for-profit organisations.
David Winnie is a senior associate and head of the Sports team at Blaser Mills Law. He has been practising exclusively in the field of sports law for over 11 years and deals with all aspects of sports, acting for individuals and organisations across the full spectrum of contentious and non-contentious matters in the sports sector.
The COVID-19 pandemic triggered unprecedented economic upheaval and has changed the way in which we do business. However, global mergers and acquisition (M&A) activity re-bounded to reach a new high in the first half of 2021, with deal activity reaching $2.6 trillion.
According to a recent report, EMEA markets were at the forefront of outbound and inbound transactions, recording deals worth €578 billion in the first six months of the year – a 15% rise on H2 2020. Moreover, new EMEA projects on Datasite’s platform are up 40% year-over-year through July 2021 compared to the same time last year. This momentum bodes well for sustained recovery and shows no signs of slowing moving into H2.
Still, the actual management of M&A needs to be as secure as possible, or else dealmakers risk financial fines and possible reductions in target companies’ deal value due to insecure data transfer practices. As we adapt to the new COVID-era and embrace hybrid working models, this challenge will only become more pressing as M&A deal activity increasingly depends on collaborative tools.
Amid a backdrop of enhanced regulatory scrutiny, dealmakers must focus their efforts on maximising compliance, in addition to minimising risk and privacy incidents during the due diligence process, to ensue deal making activities remain on an upward trajectory. This is where technology can help.
M&A deal activity increasingly depends on collaborative tools.
With legal teams more dispersed than ever before, communication and collaboration have become an additional challenge, alongside managing an ever-growing workload. Bespoke technologies are now in dire need to improve process efficiencies, extend dealmakers’ bandwidth and retain talent. Doing so ensures lawyers can focus on executing deals, rather than being caught up in endless streams of data.
The due diligence landscape has transformed at a rapid pace. Gone are the days where an analysis of the financial and legal documentation was considered rigorous enough. Now the scope has expanded to include areas such as human resources, intellectual property, proof of environmental, social and governance policies, and tax considerations.
The sheer volume of data that is now assessed has created significant challenges within the due diligence process. However, virtual data rooms (VDRs) have drastically improved both the speed and security of transactions over the past decade by providing dealmakers with direct access to the information needed to conclusively determine whether they should continue to pursue a deal.
Now, equipped with advanced analytic capabilities, VDRs are once again transforming M&A activity by supporting a number of workflows that make the due diligence process far more efficient. From in-platform messaging and advanced access control to redacting or blacklining, VDRs enable involved parties to exchange confidential information in a structured and transparent way, improving operational flow. Additional applications, including two-factor authentication, further enhance VDRs and ensure that security breaches are minimised during the due diligence process.
Gone are the days where an analysis of the financial and legal documentation was considered rigorous enough.
Whilst the due diligence process is one of the most important aspects of the M&A lifecycle, it is also one of the most time consuming. Understandably, a recent survey found that verifying and reviewing all the documents related to a transaction was the leading cause for delays during this process. However, in a high-value deal, there is often limited time to complete the due diligence process due to pressure from other prospective buyers.
Artificial Intelligence (AI) and machine learning capabilities within the VDR can significantly speed up the process by automating repetitive tasks and supporting an effective and secure legal workflow so that lawyers can capitalise on opportunities despite being busier than ever. In fact, 64% of EMEA dealmakers believe that the due diligence process will take less than one month by 2025, from the one to three months it takes today, because of new technologies.
From automated document reviews and multilingual search capabilities to contract analysis and risk and compliance reviews, AI and machine learning capabilities improve the accuracy of workflows and help to solve some of the organisational challenges which typically hinder the due diligence process. Moreover, by automatically sorting, assessing and classifying thousands of documents in minutes, and allocating these into appropriate folders to review, AI technologies are transforming the due diligence process into a more proactive and data driven operation. This not only allows dealmakers to move away from the more administrative, time-consuming tasks and concentrate their time and energy on other parts of the deal, but also helps ensure regulatory compliance in an increasingly complex landscape.
For example, The European Union’s General Data Privacy Regulation (GDPR), introduced in 2018, requires businesses to bolster their data protection processes. Failure to comply to the comprehensive policies can result in fines of up to 4% of global annual revenue, or €20 million.
64% of EMEA dealmakers believe that the due diligence process will take less than one month by 2025.
When it comes to M&A, the added complexity has been particularly apparent, especially as it has slowed due diligence and even caused some deals to falter. For example, in 2018 a multinational hotel chain received a £99 million GDPR penalty fine from the UK Information Commissioner’s Office after its M&A due diligence process failed to highlight that that the company it was acquiring had a severe cybersecurity breach four years previously.
Whilst this evolving regulatory landscape will continue to complicate some stages of the M&A lifecycle, AI and machine learning capabilities can help dealmakers to navigate this challenge during the due diligence process. In fact, with 69% of EMEA practitioners expecting data privacy regulations, like GDPR, to be a key consideration on M&A due diligence in five years’ time, the ability to search and bulk redact sensitive information within seconds will only become more pivotal to improving deal efficiency.
Cyber risk is an increasingly prevalent threat for businesses and, following an increase in data breaches across the globe, it has started to play a more important role in M&A activity over the past few years. In fact, a recent survey of M&A dealmakers across the EMEA region found that 55% of respondents had worked on M&A deals that failed to progress due to concerns around a target company’s data protection policies and adherence to privacy regulations.
Amid this backdrop, cybersecurity audits and evaluations have become a vital component of the M&A due diligence process, and today’s technologies offer far more efficient and comprehensive approaches. From categorising contracts and indexing their content for searching to dynamic reporting on the security protocols of a company, machine learning and data analytics can help provide critical insights during the research and analysis aspect of due diligence.
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By providing a more in-depth assessment, these advanced technologies provide dealmakers with crucial business intelligence and a more comprehensive assessment of a target’s security strategies. Ultimately, this information will only better equip leaders to make proactive decisions during the M&A process and speed up the timely due diligence process.
The tech transition is changing the dynamics of M&A deal activity. Once considered a differentiating advantage, digitisation is now paramount to the M&A lifecycle. From VDRs and advanced analytic capabilities to AI and machine learning programs, these technologies can better equip dealmakers and ensure greater speed, accuracy, and security across the M&A due diligence process.
With M&A deal activity picking up momentum, we should expect to see a competitive bidding landscape emerge with new market players pushing valuations higher. Amid this backdrop, companies will need to ramp up their digital capabilities. Otherwise, they will run the risk of a deal unravelling, going cold or being snapped out from under their feet by a more tech-savvy market competitor.
Telephone: +44 20 3031 6300
Merlin Piscitelli is Datasite’s Chief Revenue Officer for EMEA. Datasite is the leading SaaS provider for the M&A industry, giving dealmakers the tools and insights they need to succeed across the entire deal life cycle.
Climate change presents one of the greatest threats to human rights of our generation, posing a serious risk to the fundamental rights to life, health, food and an adequate standard of living of individuals and communities across the world. This was the conclusion from The United Nations report on climate-change and human rights published in December 2015.
Now, a recent study by the London School of Economics reveals that the number of climate change cases filed globally has significantly increased from 834 between 1986 and 2014, to 1006 cases being filed since 2015 (the year of the Paris Agreement). This surge of cases throws the issue of the enforcement of individuals’ rights and corporate obligations by private parties (often in groups) litigating against companies into the limelight.
The United Nations Guiding Principles (the “UNGPs”) on Business and Human Rights provide that states have an obligation to protect human rights from harm by businesses, while businesses also have an individual responsibility to respect human rights. In fact, as part of their duty to protect against business-related human rights abuses, states have a positive obligation to take appropriate steps to ensure, through judicial, administrative, legislative or other appropriate means, that when such abuses occur within their territory and/or jurisdiction, those affected have access to effective remedy.
In Milieudefensie v Royal Dutch Shell, a number of environmental NGOs successfully argued that Shell owed a duty to Dutch citizens to protect them from the negative impact of climate-change. The claim was brought pursuant to the Dutch Civil Code, which provides that a private law action may succeed where the defendant has demonstrably breached the “unwritten standard of care” which it owed to the claimant. This standard of care was informed by the Paris Agreement, and various human rights instruments including the UNGPs.
The number of climate change cases filed globally has significantly increased from 834 between 1986 and 2014, to 1006 cases being filed since 2015.
In this instance, Shell was held to have failed to implement appropriate corporate policies. To contextualise this decision, it is also important to note that it followed the Netherlandish public law case of The State of the Netherland (Ministry of Economic Affairs and Climate Policy) v Stichting Urgenda 19/00135 (Engels) in which the Dutch Supreme Court established that the Dutch government has a legal duty to prevent climate-change.
The reasoning in Milieudefensie is potentially significant for similar private law claims brought in England and Wales. A direct comparison can be made between the Dutch ‘unwritten standard of care’ and the law of negligence in England and Wales. It is certainly arguable that the law of negligence could similarly be informed by environmental and human rights instruments to create a liability to private parties.
In the UK there has been an increasing number of claims being brought against parent companies who are said to be responsible for harm occurring outside the UK, albeit those parent companies are not alleged to have directly contributed to the harms caused. Both Vedanta Resources Plc v Lungowe [2019] UKSC 20 and HRH Emere Okpabi v Royal Dutch Shell [2021] UKSC 3 have demonstrated a willingness from the UK Supreme Court to consider a broadened understanding of corporate liability. Whilst neither case concerned global warming in strict terms, the court’s willingness to consider expanding common law duties to parent companies provides a potential avenue for future private litigation in relation to climate-change.
The difficulty such a claim would have in the UK courts would likely be in proving a loss which was caused by the breach. This was an issue in the Californian case of the Native Village of Kivalina v ExxonMobil Corporation (2012) No. 4:08-cv-01138 (N.D. Cal.). A group from the Alaskan island Kivalina claimed damages from the defendant energy company for the extreme erosion and weather events they faced, claiming the weather patterns were caused by the defendant's actions, which they alleged had an impact on climate change. The case was dismissed, in part because the plaintiffs could not make out their case on causation. Demonstrating a causative link between the loss incurred and the defendant’s actions is a nebulous process which demands more from the science of attribution than can currently be provided.
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The difficulty of claims such as this was further reflected in the New Zealand case of Smith v Fonterra Co-Operative Group Limited [2020] NZHC 419. The court struck out the climate change claims brought in negligence and nuisance, but refused to strike out the claim for breach of an inchoate climate-change duty of care.
Much weight was placed on a 2018 paper authored by three New Zealand Supreme Court Judges which argued in favour of a new private law cause of action because the problems of climate change do not easily conform to existing forms of action. The paper considered that private law might develop to meet some of the challenges confronting climate change litigation and adjust the traditional concepts of standing where the wrong affects the whole of society and, in particular, where the impacts of climate change are intergenerational and will impact young generations more significantly.
The inquest in the UK case of Ella Kissi-Debrah was the first UK case in which the coroner found that air pollution was a contributory cause of illness and death due to the child’s asthma being worsened by high levels of air pollution in the area in which she lived. A second inquest focussed on the aspects of causation and contribution and what could have been done to limit the impact of the air pollution. The coroner held that the air pollution had made a “material contribution” to Miss Kissi-Debrah’s death. This amounted to a breach of the UK’s air quality legislation. There have been proceedings arising out of the coroner’s report which have resulted in court orders requiring urgent corrective action and has called into question the need for a change in the law to comply with Article 2 of the European Convention on Human Rights, which states that everyone's right to life shall be protected by law.
Demonstrating a causative link between the loss incurred and the defendant’s actions is a nebulous process which demands more from the science of attribution than can currently be provided.
The ongoing German case of Lliuya v RWE (Case No. 2 O 285/15) provides a further example of private law being used to challenge climate change by recognising the possibility that a private company could be responsible for the effects of its emissions offshore. The plaintiff is a Peruvian farmer who is suing Germany’s largest electricity producer. He alleges that his home on the flood path of Palcacocha Lake is threatened by the potential of two glaciers collapsing into the lake and in turn causing significant flooding. The allegation is that this is all a consequence of global warming. He alleges that RWE has been a major emitter of greenhouse gases, which are causing glacial retreat increasing the risk of flooding in the area.
In respect of quantum, the plaintiff is seeking £14,250 from RWE for its contribution to global warming. This figure reflects the Institute of Climate Responsibility’s estimation that RWE is responsible of 0.47% of global warming emissions from 1751 to 2010, and so the claim is for 0.47% of the cost of the plaintiff protecting against the impact of the glaciers collapsing. Given the potential of private companies being responsible in domestic courts for offshore emissions, the causation issues in play, and the novel approach to quantum pleaded by the plaintiff, this case is hugely significant.
Developments in climate science, particularly in respect of attribution, will continue to increase the significance of bringing private law claims. This emphasises the need for companies to act now by carrying out due diligence to identify risks within a business that may give rise to a private law action being brought against them. As with those cases considered above, private law climate change litigation attracts a lot of publicity even before any material findings by the relevant courts. Moreover, pressure applied to large companies through litigation comes hand in hand with pressure on politicians to act. To that extent, it is likely that private law climate change litigation will continue to gain traction across the globe.
Stephanie Eaton is an associate at Signature Litigation LLP and Michael Rawlinson QC and Samuel Cuthbert are barristers at 12 King’s Bench Walk.
Stephanie Eaton, Associate
Address: 138 Fetter Lane, London EC4A 1BT
Telephone: +44 020 3818 3500
Email: stephanie.eaton@signaturelitigation.com
Michael Rawlinson QC and Samuel Cuthbert, Barristers
Address: 12 King's Bench Walk, Temple, London, EC4Y 7EL
Telephone: +44 020 7583 0811
Email: rawlinson@12kbw.co.uk | cuthbert@12kbw.co.uk
With travel abroad still under strict restrictions thanks to the ongoing COVID-19 crisis and the impact of Brexit, staycations have become a significant trend of 2021, which has helped to boost the UK economy and support local businesses at what has been a period of significant economic uncertainty. In fact, according to holidaycottages.co.uk, four out of five Brits (84%) are planning a staycation in 2021.
We have already seen the positive impact of the staycation boom on numerous businesses, including Hull-based holiday home manufacturer Willerby, which recently reported that it was hiring over 100 staff to meet the growing demand for holiday homes. In fact, Park Leisure recently revealed that over three quarters of Brits (77%) now aspire to own a holiday home in the UK.
Now more than ever, the public are contemplating buying a holiday home or lodge on a park, leading to more interest in existing and new operators looking to invest in this sector by buying or developing a holiday park business. Yet there are numerous legal pitfalls that anyone should be aware of before committing to such a move. This article explores the main issues to note when dealing with holiday parks, but we have also referred to residential parks where appropriate as they are governed by similar regulations.
The main value of a holiday park is usually the property or land that is being purchased. It is therefore key to check that the title plans match the boundaries on the ground, as parks are often added to over time, but this will not have been noted in the plans.
Access is vital. If access to the park is via a track or small road over adjoining land, the correct rights need to be granted to get in and out of the park. The same applies for services. For example, we offered advice for a situation where a park used a drainage pipe which was owned by an adjoining farm. Years later, pitches had been added and the farm had been sold to another party, leading to a dispute as to whether the park had the appropriate rights to use the drains.
The main value of a holiday park is usually the property or land that is being purchased.
Check the site has the correct planning permission and site licence for the current use. Park operators can sometimes add additional units to the park without securing formal consent which can lead to difficulties later down the line. While rights can be acquired, this is not guaranteed. Discrepancies may also occur between the number of units permitted by the planning permission and those allowed under the site licence (which will usually prescribe a minimum distance between units for safety purposes).
Ensure any third party funding the purchase of the park understands the valuation and operating model of how parks work and the process involved in making a profit. A lack of understanding can lead to confusion or conflict, which can damage relationships between a purchaser and any funder or significantly impact the profitability of the park. There are specialist valuers who can provide education in how a park operating model works.
It is also important for a buyer to ascertain that the necessary licences are in place with the occupiers on site. Informal arrangements may develop over time, particularly on holiday parks; however, this means that there may be no written record of the licence terms. In this instance, the rights and responsibilities of each party should be considered in terms of transfer of land and whether there is an opportunity for a buyer to utilise the lack of formality. This could involve seeking to introduce new licence terms and/or terminating licences to aid redevelopment opportunities.
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Holiday parks often have site rules in place which complement any Licence Agreement. A buyer will need to know what these rules are, and whether they have been implemented appropriately and enforced consistently.
Ensure any third party funding the purchase of the park understands the valuation and operating model of how parks work and the process involved in making a profit.
As part of the due diligence process, potential buyers should seek information on previous and existing disputes with occupiers on the site. In the case of a residential park, it may be worthwhile to search the record of decisions maintained by the First Tier Tribunal to ascertain if there are any previous relevant decisions.
A residential park in particular may have a qualifying residents association in existence. A buyer will need to know of its existence to ensure that after purchase they discharge their statutory duty under the Mobile Homes Act 1983. This ensures that the buyer consults the association on all matters related to the operation and management of, or improvements to, the park which may affect the occupiers either directly or indirectly.
It is imperative to discuss the potential purchase of a holiday or residential park with lawyers and accountants to confirm the most effective strategy when it comes to structuring any transaction. Whilst a share purchase will ordinarily be a more tax-efficient method, it will result in providing a larger suite of warranties and a tax indemnity in respect of the company’s tax affairs to the buyer. Therefore, serious consideration should be given to which structure is the most beneficial in all circumstances.
As part of the due diligence process, potential buyers should seek information on previous and existing disputes with occupiers on the site.
Always ensure a proper and in-depth due diligence exercise is carried out. Despite the fact that holiday and residential park businesses may have a limited number of assets and contracts, there are almost always some issues or liabilities in respect of the business. In the absence of an effective due diligence process, the buyer would be unaware of these issues which would only then come to light after the sale has completed.
Ensure that contractual protection is provided when it comes to the seller’s compliance with planning laws and consents in connection with the business. The most common issue with holiday and residential park businesses is a failure to adhere to the terms of the Site Licence or other applicable permits, consents, regulations or legislations. As such, having robust contractual protection in place to avoid these potential liabilities is crucial.
As with many aspects of life over the last year or so, how we holiday has never looked so different. That trend of having more staycations is likely to remain given the ongoing uncertainty presented by COVID-19 as well as additional regulations caused by Brexit. The impact on the holiday park sector in particular is being felt. Whilst this will undoubtedly lead to opportunities to invest and develop further in this sector, as with many things there are associated risks, as highlighted above.
For any buyers or individuals considering purchasing a park, it is crucial to secure the right advice from legal experts, accountants, and specialist valuers to ensure legislation is adhered to and avoid issues cropping up later down the line.
Address: City Point, 29 King Stree, Leeds, LS1 2HL
Telephone: +44 0113 227 9344
Email: NDyson@LawBlacks.com
Blacks Solicitors is a 25-partner firm providing a wide range of legal services to commercial and private clients in Yorkshire and across the UK. With 180 employees, the Leeds-based firm provides advice on corporate and commercial law, commercial property, leasehold enfranchisement, employment & human resources, commercial and civil dispute resolution & litigation, residential property & conveyancing, wills & probate, and family law. In addition, Blacks also acts for clients across a range of niche sectors including healthcare, education, leisure & hospitality (including holiday & home parks and hotels) and sport.
Nick Dyson is a partner at Blacks Solicitors and heads up both the Commercial Property team and specialist Holiday & Home Parks team. He advises property investors, developers and occupiers as well as funders on acquiring, developing, selling, letting and charging property, and is regarded by the Legal 500 as “always reliable”. Since taking his position as a partner, Blacks’ Commercial Property team has more than quadrupled in size.
Workplace design expert Stuart Finnie delves into the current trends in the legal sector’s office priorities and offers his thoughts on how law firms may operate in years to come.
The legal workplace is on the cusp of a major transformation, with COVID-19 forcing even the most traditional of firms to reevaluate their ways of working.
The legal sector has always favoured the traditional workplace and has previously struggled to consider remote working as an option. Now, however, there is an acknowledgement that work can be done outside a physical workspace. In fact, a recent Unispace survey of some of the world’s largest employers found that more than half of employees (52%) expect their teams to return to the office by Q3 2021, but critically, not full-time.
In line with this thinking, firms are making changes. Freshfields and Linklaters have recently announced new agile working policies that will allow staff to work remotely up to 50% of the time, and Herbert Smith Freehills has announced that colleagues can work from home up to 40% of the time, even if all restrictions are eased.
But like any other sector, law firms must adapt and become more agile to address the ever-evolving needs of their teams and their clients. While many found themselves facing the challenge of working virtually over the past 18 months, new questions have now arisen surrounding the legal workplace of the future and ensuring that it is prime for the hybrid working world.
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Though a physical working space will still be a priority, the future legal workplace will need to balance competing desires for mobility, collaboration, and flexibility. With this in mind, it is not only the physical workspace that needs to adapt, but rather the entire legal sector ecosystem, and this boils down to the tools and processes that firms use.
For example, many of the traditional paper-based processes used by law firms are going through a digital transformation, meaning that there is less need to be surrounded by paper resources like case files at all times. Electronic signatures and document management systems are also supporting the move to more digital practices. As a result, the spaces once occupied by legal libraries are being repurposed for more casual lounge areas and other staff amenities.
The perceptions surrounding work and how it is carried out are also changing in the sector. The pre-pandemic status quo demanded heavy physical attendance and presenteeism during core business hours, but many firms are rising to the challenge of breaking with this tradition and giving their employees more flexibility.
Additionally, a large portion of what lawyers do is done in collaboration, whether that is with local or cross-border colleagues and clients. Therefore, understanding what collaboration means for the legal environment, as well as unique workflows, is a key priority and needs to be factored into workplace design. 2020 data from Acritas notes that seven in 10 lawyers say there are barriers to collaboration within their firms, and though the use of collaboration tools has almost doubled in law firms throughout the pandemic according to Bloomberg Law, there is still more to be done.
The spaces once occupied by legal libraries are being repurposed for more casual lounge areas and other staff amenities.
The question of how to support working relationships effectively, both in person and remotely, looms large. There must be a variety of team spaces that colleagues can benefit from both in-person and virtually, that allows them to share information amongst their teams efficiently.
The right equipment is also essential to helping make hybrid working effective. We are seeing new technologies such as portable monitors and Owl Video Conferencing Cameras introduced to address the needs of a hybrid team, supporting in-office and remote participants and ensuring everyone has a positive, collaborative experience when working together.
There is not yet a clear, universally agreed answer to the definition of hybrid working as it is a work in progress. Businesses need to trial, adapt and evolve with immediate, medium and long-term solutions requiring implementation at different points. Hybrid suggests variety, and this needs to be matched in the layout of a workspace. Businesses often believe that hybrid working and collaboration mean that an open-plan workplace will be best, but in reality, there should be a variety of different spaces available.
Additionally, by having this variety of options to use, firms can ensure they maintain a level of formality to the office and have different spaces available depending on the client and the purpose of the meeting.
That said, we are seeing a more general shift towards less formal client interactions – the pandemic and home working has changed the balance of interaction between work and home, with people being given new insights into their clients’ and colleagues’ lives through Zoom or Teams calls. The question remains whether clients will want the same level of formality that was evident pre-pandemic.
The question of how to support working relationships effectively, both in person and remotely, looms large.
The legal industry is also one that is prime for ‘learning from osmosis’, with associates often being paired with partners and other senior team members to shadow them and learn the ropes. Now, as firms adopt hybrid working practices, it is vital that more senior members of the team are still accessible and available to learn from.
While firms like Linklaters created around 600 online training sessions for trainee staff during the pandemic, in-person learning will still be crucial. Having a variety of workspaces available in the office can also help support in colleagues’ learning and development. By being exposed to more conversations, trainees are more likely to pick up knowledge by osmosis than compared to shadowing one partner. Anecdotally, it has been stated that younger team members have a higher likelihood of feeling more confident quickly if they are in a workspace that is open and fosters collaboration.
The workplace is no longer constrained by four walls but can exist almost anywhere. There is no longer a one size-fits-all approach. Spaces, tasks, experience and spend must all now focus on productive output, and the intent behind coming into the office.
Drawing people back to the workplace must be done carefully and sympathetically. Staff need to return to a space that supports their needs and workstyles, which requires an understanding of individual tasks and ways of working at all levels, from juniors through to managing partners.
Address: Devon House, 58-60 St Katharine's Way, St Katharine Docks, London E1W 1JP
Telephone: +44 020 8125 4600
Stuart Finnie is a skilled architect and interior designer responsible for managing design operations across the EMEA region with global workplace creation experts Unispace.
When you serve such a polarised variety of clients, there is no option other than adapting the way you comport yourself to the kind of client business you are working with, and, specifically, to its organisational culture. Together with conducting legal background checks, we always try to learn as much as possible about each of our client’s field of activities and business environment. This helps us better understand the client’s individual needs and provide better service.
In order to properly conduct ourselves when working with various clients, we use the knowledge we have amassed over the years and adapt it to the kind of organisation we are representing. For example, when representing a multinational company, we always account for the organisational hierarchy and operate in complete accordance with it. On the other hand, when we represent a start-up, we often find ourselves working simultaneously with the management and with investor representatives. When we represent certain family-owned businesses we will be sensitive to the fact that, often, important decisions are also made by family members and not just by the CEO or the board.
Aside from this, the extensive regulation in Israel forces us to constantly learn and keep up with the regulations for the represented business’s specific sector. This is no simple task and requires time and resources, but this cannot be forgone if we want to provide excellent legal service.
In my experience, complex disputes that deal with large sums of money are not resolved as long as the parties are unwilling to compromise. Before appealing to the court and even after the beginning of court proceedings, when each party believes in its own righteousness and is sure of its victory, the parties are usually not yet ready for compromise. For this reason, the chances at this stage of achieving an agreed-upon settlement are low. We have had cases in which we were able to solve disputes at an early stage, even before petitioning the courts, but these were the exceptions. In our experience, the suitable time for compromise, as far as the two sides are concerned, is at a later stage of the judicial process – following massive discovery of documents, an attempt to reach a settlement at mediation, and submission of witnesses’ affidavits.
When you serve such a polarised variety of clients, there is no option other than adapting the way you comport yourself to the kind of client business you are working with.
At this late stage, many of the “cards” have been exposed, each party can assess their risks and prospects in the proceedings and there may be better chances of reaching a reasonable compromise.
After years of representing investors from Israel and abroad, we have learned that investors are always interested in product innovation and uniqueness at the company they are investing in and its chance of sweeping the market.
Having said that, it is just as important to investors to understand the personality and state of mind of the entrepreneurs at the companies they invest in. Investors inject companies with money for the sole purpose of seeing return on their investment. That is their only goal. Entrepreneurs do not always manage to get into the investors’ heads and comprehend this. Pointless stubbornness on the part of entrepreneurs during negotiation of investment terms and company operations of the kind that might reveal them as “problematic personalities” in the eyes of the investors, may result in investors backing out of their intentions to invest. I always tell entrepreneurs that they have the right to quarrel with their investor only once – just before the Exit.
LNA, of which we are members, has over 100 law practices scattered over the world. Most members’ are leading law firms with reputations and strong professional credentials in their countries in addition to ample experience working with international clients. The LNA Network holds professional conferences around three times a year. At these conferences we are exposed to, among other things, regulations and rulings from many countries and global developments affecting various legal specialties.
I always tell entrepreneurs that they have the right to quarrel with their investor only once – just before the Exit.
Being part of the LNA network enables us to obtain valuable information for our clients in Israel and abroad as well as the ability to refer any client in need of legal services in a certain country to the network’s law firms there. Usually, we are personally acquainted with the relevant lawyer abroad who will represent the referred client.
We are proud of the fact that in the winter of 2020, just before the outbreak of the COVID-19 pandemic, our firm hosted the LNA European conference, which was held in Israel for the first time. The conference was a great success.
If the differences in various negotiation cultures could be classified, you could say that in general, business negotiations with people from European countries are more pertinent and less forceful in many cases than negotiations with Israeli businessmen, which often may deteriorate to pointless forceful conflict.
Occasionally, in these instances, pointless conflict during negotiation to settle a business dispute should be stopped quickly, even if this may convey weakness. I have in the past, during heated negotiations, asked for a recess to consult with my client and implore them to calm down or even concede on non-fundamental issues so that the achievement of compromise would not be hampered. This kind of intervention is not always welcomed by the client in the heat of the moment, but after de-escalation clients tend to appreciate it very much.
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By law, a director must always act solely in the interest of the company. Nevertheless, in practice this is not always so easily done. Often, directors are sure they need to act on behalf of whoever appointed them. Directors in Israel are appointed and serve on many occasions as part of a network of interests. Unfortunately, many directors are not aware of their great liability and immense legal exposure as directors.
In a company that our firm served as legal counsel, an interested party transaction was discussed by the board. During the board meeting, I stated my opinion that a fairness option should be received for the transaction and its terms before being brought to the board’s approval.
Most of the directors agreed with me, and the proposal was accepted. The director interested in the transaction, who had much influence at the company, was very angry with me and saw me as responsible for delaying the transaction. After time passed, he phoned me and apologised. He had read about a company that had approved a similar transaction without receiving such an opinion, and the directors were sued for tens of millions of dollars.
I believe that a significant proportion of the employers in the market have not yet internalised the enormous change made in Israel in this field. Over the past few years, we have seen a process of new and extensive legislation in labour law in Israel. Alongside rightful protection accorded to disempowered employee populations by the new laws, it is also evident that there is a trend of imposing an unreasonable and unjust burden on employers to the extent of “criminalisation” of a fundamental part of the labour laws.
Today, before making any managerial decision regarding an employee, every employer must check if it is even legal. Furthermore, there are the labour court rulings on the topic of employees’ right to organize, which must not be hindered. All this brings us to the realisation that this field has fundamentally changed from what it was just a few years ago, and employers today must consider their actions with much caution.
Today, before making any managerial decision regarding an employee, every employer must check if it is even legal.
It is very important to think together with the client, to understand what motivates them and their business considerations. However, when these conflict with the law, a lawyer must stand up to the client, even if he is an influential manager or businessman, and even if this may result in termination of representation. I have had such disagreement with clients. It is my experience that, in the long run, a client will appreciate a lawyer that has its back more than a lawyer that cuts corners.
Working with family-owned businesses is my baby. The inherent challenge and difficulty in a family-owned business of achieving success while preserving the family was what attracted me to this this topic many years ago. During the past seven years I have served as the Academic Director and lecturer at the Business and Family studies program initiated by the Bar Ilan University.
It is no easy task to be part of a family that owns a business, whether you work at the business or outside of it. The fear of disputes that may damage the business and family relations is ever-present, even when all seem well.
In this regard, I would advise to always have a binding written agreement between family members to settles relations and serve as a safeguard against conflicts that may hurt the family and do damage to the business; the earlier the better.
The fear of disputes that may damage the business and family relations is ever-present, even when all seem well.
The conduct in American companies is structured in a way that, to Israelis, may seem cumbersome at times. Many parties are involved in the organisation in almost all fundamental business occurrences and there is an orderly process of subject-learning and voicing of opinions by all parties, who are by definition of their roles in the organisation supposed to be involved in the finalisation of said business events. Additionally, the process of decision-making itself is orderly, as mandated by the organisation’s nature.
This kind of conduct is not common in Israeli companies, where decision-making is often done hastily by a small group of senior staff. It is noteworthy that today, the more that Israeli companies and tech-focused companies in particular start to interact with American businesses, the more they are quickly learning how to conduct business in the American style.
My mentor during my internship and in the early stages of the legal practice was the late Eli Zohar Adv., who apart from being a famous lawyer in Israel not only had excellent professional skills but was also blessed with praiseworthy personal attributes. Eli Zohar was definitely a lawyer deserving of the title “a lawyer and a gentleman”. I had the opportunity to work with him and learn from him not only during my internship, but also afterwards as I continued at the Seligman firm. I learned the art of litigation and cross-examining witnesses from Eli, as well as the obligation to respect the other party even when waging a fierce legal war. From attorneys Pinhas Rubin and Moriel Matalon, whom I worked beside at the Gornitzki firm, I learned how to engage in complex commercial transactions. The late Phillip Mandelker, whom I worked alongside at the Rosenman firm in New York, taught me a lot about commercial litigation in the US. I am grateful to all of my professional teachers for all they have taught me.
As one who began his legal practice in the largest firms in Israel and the US, I am well acquainted with the advantages and drawbacks of their services. A large firm is a brand name and has a relatively large array of professionals to offer clients, which provides a sense of security. However, large firms have high overhead costs which raise rates, and for this reason are not right for all clients. Another fundamental difference between large firms and small firms (like ours) is in the access to the senior partner involved in the case or transaction.
I often hear from clients that came from large firms that they felt “lost” in these large legal organisations, and that in the end the lawyer that worked with them had two or three years of experience. We do our best to make our experience and skills available to all our clients. I am involved in almost every case at our firm and clients have almost immediate access to me.
Business life entails many surprises and stressful events that require immediate action. Confrontational events like lawsuits or investigations, as well positive events like the maturing of company acquisition or sales negotiations, may create a sense of urgency in clients, requiring immediate consultation with a lawyer. I have found myself, more than once, when on my way home after a long day at work, redirecting to an urgent meeting with a client because of such developments. We emphasize availability and quick professional response for all our clients, small and large, and we know from our experience that our clients appreciate this very much, and that it is one of the most important issues for our clients.
A Hebrew version of this article originally appeared in TheMarker.
Moshe Kahn, Founder
Address: Amot Investments Tower, 7th Floor, 2 Weizmann St., Tel Aviv 6423902, Israel
Telephone: +972 3-691-4775
Fax: +972 3-691-4706
Email: mk@kahn.co.il
Moshe Kahn has more than 20 years of expertise as a business lawyer providing legal counseling and representation to local and foreign companies, including leading multinationals operating in Israel. He is also a member of key committees at the Israeli Bar Association, the author of many professional articles, and a regular organiser and speaker at conferences at the Bar Ilan University.
Moshe Kahn Advocates deal with an array of legal concerns including commercial law subjects, corporation law and commercial litigation, commercial contracts and international dealings, representation of employers in labour disputes, family-owned businesses and many more areas. Moshe Kahn Advocates is the Israel law firm of Legal Netlink Alliance, an internationally recognised organisation of independent law firms with more than 100 law offices located worldwide.
