Understand Your Rights. Solve Your Legal Problems
The firm has added to London’s crop of bumper financial results, announcing a 9% increase in its PEP to £1.85 million and a 1% rise in revenue to £1.82 billion in the financial year concluding 30 April.
Clifford Chance’s growth figures put it behind rival Allen & Overy, a fellow Magic Circle member. Allen & Overy reported a 5% increase in revenue to £1.77 billion against a 17% rise in PEP. The firm’s pre-tax profits jumped by 19%, bringing its total pre-tax profits to £822 million.
Despite Clifford Chance’s lower percentage uptick in revenue for FY2021, the firm has performed impressively over the past six years, with revenues increasing by 35% during the period, with PEP up by 65%.
Clifford Chance has said that 2021 marks its sixth consecutive year of profit and revenue growth and is its strongest set of financials yet, despite the disruption caused by the uncertainty caused by the Covid-19 pandemic.
Matthew Layton, global managing partner of Clifford Chance, has said he predicts activity will remain high for the firm’s transactional practices and that he anticipates an increase in activity for its litigation and dispute resolution teams as changes in government rules and regulations will see the resumption of normal court operations.
Andrew Mawson, founder of Advanced Workplace Associates, explores the growing pressures faced by law firms to adopt more flexible ways of working post-pandemic.
A survey of UK law professionals by Thomson Reuters found that 86% would like to retain options such as remote working and flexible workdays. The ‘State of the Legal Market 2021’ report revealed that lawyers have benefited from less commuting and the work-life balance that home working has provided them. Even before the current crisis, there was a sense that lawyers coveted solutions to combat the job’s long hours and demands.
With growing pressure from clients to cut their CO2 emissions, many law firms have also identified a permanent move to a flexible or ‘hybrid’ model as a way of reducing global business travel, extensive energy consumption in corporate HQs and other factors that contribute to their overall carbon footprint. In a recent study in the legal sector undertaken by my firm Advanced Workplace Associates, we calculated that a move to hybrid working would lead to a 31% reduction in CO2 emissions. But widespread change in the legal sector is no easy task. As is the case in many other industries, there is now a tug of war between two groups: those who want to embrace new ways of working because they see the benefits for employees and the broader organisation, and those who are entrenched in habits and behaviours built over many years.
Still, there are certain factors that make it a uniquely challenging proposition for law firms. Unlike a PLC, where a board can largely mandate change, the partnership structure operated by most law firms brings a level of democracy that means considerable consultation is required to secure enough support for it. Lawyers are also highly skilled professional arguers who may have a personal or professional stake in keeping things as they were pre-pandemic. Add in that many law firms deal with sensitive information (some of which is paper orientated), and you have a confluence of factors that can make it extremely difficult to get agreement to change.
At an intrinsic level, opposition to change, which is manifested in ‘change resistance’ comes primarily from our brain’s preoccupation with keeping us physically and psychologically safe. The brain is an extremely sophisticated biological computer that builds a picture of the world through the lens of our senses. As it scans the environment and programs lived experiences, it hardwires habits and repeated patterns of activity so that it can devote latent brainpower to new or complex tasks. With this in mind, it’s easier to understand why some leaders in law might be reluctant to embrace change. Imagine a senior partner who joined the firm as a junior three decades ago; they would have learned how to do things by watching and copying their own seniors, using technology and approaches that existed then. The 3 million minutes in which they have been in a traditional working environment has conditioned their mental model of the world.
In turn, their seniors taught their ways of doing things – how to behave, what to say, who to hang out with, and even what to wear to be accepted. Over time, these behaviours became ingrained and passed down through generations. They have been ‘hardwired’ into the average lawyer’s brain so that he or she can focus on more challenging intellectual challenges that bring in more fees and generate success for the law firm.
Leaders who want to push through the transition to new work models have a fight on their hands. Standing still is likely to frustrate much of the existing workforce who want change and deter the best new and returning talent. At the same time, it would be unwise to alienate other senior partners who could take clients to rival firms.
The first and most important rule is not to go with a dictatorial top-down strategy with senior lawyers and partners. Doing this is likely to threaten their mental model of the world which will invoke a negative response. The brain works out pretty quickly whether you are a friend or foe. When the brain senses a social threat, the same circuits are activated in the brain as those from a physical threat. Neuroscientist Dr David Rock’s SCARF model points up these factors: social status (relative importance to others); certainty (ability to predict the future); autonomy (sense of control over events); relatedness (sense of safety with others); and fairness (perception of fair exchanges between people). It’s easy to see that a partner who had an office, which conferred status and people around them that provided certainty and relatedness, all trigger a threat response.
For those senior leaders seeking to manage change (e.g Managing Partners, COO’s and HR Directors) the goal should be to help employees and especially senior players work out the win-loss equation in their brains, based on factors such as personality, needs, social drivers and economic drivers and pre-conditioning. There is never a one-size-fits-all solution. It’s easy to see how a parent’s priority will be different to those of a young, ambitious lawyer who has just moved to the city.
Leaders of change cannot expect everyone to buy into the transformation immediately. It’s a process in which the leader is a facilitator. The essence is to build understanding, achieve as much consensus as possible, build a framework that allows different teams to adopt different models of working within a framework that affords fairness. New Working together agreements need to be struck through discussions between Senior Lawyers and their teams.
Many law firms recognise the need to maintain increased levels of flexibility in working arrangements once the pandemic ends. COVID-19 has demonstrated that the existing mental models of the world, especially how and where we work, can and should be updated. To make the change leaders require a mix of balance, knowledge, courage and tenacity.
Getting a speeding ticket is not a misdemeanor or felony, but it can have serious and long-term implications. For instance, you will have to pay a hefty fine, you may lose your license for a while, and your insurance cost may rise. But, once you already have a speeding ticket, there’s no taking it back. The next step is to find the best way to deal with it.
When you are handed your first speeding ticket, it’s normal to feel stressed and upset. You may have to miss work for court appearances and will have to deal with the ordeals of it. However, knowing that there are reliable attorneys out there to help you is a relief. Here are 5 reasons why you should hire a lawyer to fight a speeding ticket.
Ever heard of someone getting a speeding ticket and walking away without losing a dime? These are the type of people who hire a lawyer to fight their traffic ticket. Lawyers know how to get out of a ticket by finding errors that an average person can’t. If you are hiring a lawyer, odds are your traffic ticket will be dismissed at the first court appearance.
Let’s say the police officer was careful enough while writing you a ticket, and there are no errors to be found. Even in this case, a lawyer can negotiate on your behalf in court and reduce your ticket. Lawyers can demand concessions based on your good driving history, or they might find another convincing reason to get your ticket reduced. This is something that you might not be able to pull off on your own.
As a citizen, you might not know your rights and privileges when it comes to traffic law, but a lawyer does. Having someone on your side who understands the law entirely will significantly improve your odds of getting your ticket dismissed or reduced. A lawyer knows how to represent you before the judge and argue on your behalf within the legal framework.
Hiring a lawyer sounds like an additional expense, but it’s not. If it was an excessively expensive affair, traffic lawyers wouldn’t exist in the first place. Most traffic lawyers have reasonable rates because it takes a lot less time fighting a speeding ticket than handling a felony case. It may be hard to believe, but a lawyer can wind up hundreds of traffic violation cases in a day. In all probability, you will end up paying less towards the lawyer’s fee and the ticket combined than you would have otherwise.
People who decide to represent themselves in court often succumb to prosecutors. Part of the reason is they don’t know how to fight and end up getting harsh penalties. On the contrary, when a lawyer represents you, prosecutors know that they don’t stand a chance against you. As a result, you are less likely to pay the full ticket amount or in some cases, walk away without paying anything at all.
Hiring a lawyer indicates that you are more invested in your case than the violators appearing before or after you. Lawyers have a professional rapport with the judge which works inadvertently to your advantage, so if you find yourself with a traffic ticket, hiring a lawyer is always a good idea.
The settlement on Monday came after the Manhattan federal appeals court discarded a $21 million judgement back in August that Tiffany won the suit following a jury trial in 2017.
A trial judge ruled that Costco was liable for selling the disputed rings, despite the retailer's claims that “Tiffany” had come to be a generic term used to describe the rings’ prong setting. The decision left jurors to decide how much Tiffany should recover.
Despite the ruling, the appeals court stated that Costco had acted in good faith and that customers of the retailer were intelligent enough to understand that Tiffany & Co neither produced nor endorsed Costco’s “Tiffany” rings. It is estimated that 3,349 customers purchased Costco’s Tiffany-set rings during the period covered by the lawsuit.
Tiffany & Co sued Costco on Valentine’s Day in 2013 to protect the company’s brand and cachet. The terms of the settlement have not been disclosed.
Trips and holidays are often some of life’s most memorable and exciting moments. Most of us can't wait to pack a suitcase and head off on a new voyage. However, with flights cancelled, borders closed, and quarantine restrictions in place, COVID-19 has postponed many trips for two years, denying us the chance for exploration and relaxation. However, more recently, many countries have reopened their borders to tourists due to the fast-paced vaccination rollout. According to research, a positive vacation can have a substantial impact on energy and stress levels. After a good trip, 94% of study participants were found to have more energy.
Nevertheless, there still remains the risk of becoming infected during your trip and the general stresses that surround foreign travel. Here are a handful of tips that’ll help you enjoy the stress-free holiday that you deserve after a long year of studying.
The first thing you need to do is to get prepared for your trip. Indeed, you need to pack your suitcase, gather documents, and grab some backup cash. However, you also need to adapt your vacation-preparation process to the new reality. It's recommended to get fully vaccinated to strengthen your immune system against the disease and help protect others. It is important to note that it won't create an invisible shield that will indefinitely protect you from the virus, however, it will prevent you from becoming seriously sick. This is especially important if you travel to a country with a poorer healthcare system. Prior to travelling, you should also remember to get insurance cover in case you run into any problems during your time away.
Even when fully vaccinated, there is still a risk of becoming infected. Therefore, you need to pack a lot of essentials in your backpack. In addition to anti-bacterial wet wipes and sanitiser, you need to pack face masks, and potentially disposable gloves, as these items will help to keep you safe from the virus and will prevent the virus from interrupting your travel plans. Note that the airports and planes are places where you will be forced to spend a lot of time in a crowd of other people. Therefore, remember to distance yourself from others as much as possible.
If you want to get a stress-free holiday, you should pay attention to your stress triggers as best as you can, then come up with different methods for coping with your anxiety. As a student, recent exams and assignments, such as marketing essays or management essays, may make it difficult for you to relax. Finding a way to unwind, whether it be reading a good book, taking a hot bath, or making use of the hotel room’s minibar, is important to keep the feel-good holiday mood afloat.
If your stress is covid-related, remind yourself that you’re taking all the necessary precautions. So long as you use hand sanitiser regularly, wear a mask, social distance from others, and have had your vaccine prior to travel, then your risk of infection remains relatively low.
To have a great trip in the Covid-19 era, you need to build thorough plans that will help you stay safe. There are a lot of tools that can help you create a solid plan. For instance, you can use Google Maps to check when particular places are most popular. It’s a good idea to plan to visit attractions during their quietest times or stick to attractions that are outside and allow for sufficient social distancing. Researching ways to reduce your risk of infection is quick, simple, and helps to keep your trip as safe and relaxing as possible. You might want to check out which companies offer the option to book public transport tickets online to reduce your interaction with others at ticket offices.
As a law student, trips and holidays are a great way to spend your long summer break and serve as a great stress-reliever for the anxiety of last semester. Although it’s important to be cautious when travelling during the pandemic, it’s possible to have an easy-going, relaxing trip if you plan ahead and follow the necessary precautions.
The proposed class action settlement was disclosed in a federal court filing in Kansas City. However, the deal does not resolve claims against Mylan, with a trial scheduled for January 2022.
Despite the settlement, Pfizer has said in a statement that it denies any wrongdoing and believes its actions were appropriate. The litigation follows public outrage in 2016 when Mylan increased the price of a pair of EpiPens, a handheld device that treats severe and life-threatening allergic reactions, to $600 from $100 in 2008. The move by Mylan became central to the ongoing debate about the often unaffordable cost of medicines and healthcare in the United States.
Consumers accused Mylan and Pfizer, which produced the EpiPens for Mylan, of anti-competitive practises that gave them a monopoly over the market for anaphylaxis treatments. Last month, US District Judge Daniel Crabtree dismissed most, but not all, of the allegations against Mylan. The remaining claims concern a patent settlement that is said to have delayed the launch of a generic epinephrine auto-injector. However, Mylan has said it believes its conduct was lawful.
Back in 2017, the company agreed to a $465 million payout to resolve US Justice Department claims that it overcharged the government for the EpiPen.
Debut share some helpful advice for graduates seeking a career in law.
Searching for your first professional job after graduating can be daunting and stressful. Having spent years studying and gaining experience, you’re finally ready to take that first step onto the career ladder. However, the pressure to succeed and land that dream role in the prestigious firm of your choice can be overwhelming, and unsuccessful applications can be disheartening and damage your confidence.
Yet, you are not alone in this situation. It is important to remember that the jobs market, particularly in the legal sector, is extremely competitive. Recruiters and hiring staff will be sifting through hundreds of applications for each position, so it’s important not to beat yourself up when you don’t quite make the grade. There will always be other positions opening up for you to take a stab at.
So, what can you do to ease the pressure of applying for graduate roles?
Once you’ve applied to several positions, it’s easy to worry about their success, and waiting to hear back can be a stressful time.
Psychologist and Family Therapist, Dr. Kalanit Ben-Ari comments, “In terms of finding ways of coping, after sending an application, knowing that you did your very best will help you to let go, without any regrets, whilst waiting on an outcome. Accept that you did your best, the rest is not in your control. You do not know who else applied, or if the company might even have changed the role because of other business reasons that you are not aware of.”
If you’re waiting to hear back, the best thing you can do is to keep active. By occupying your mind you will keep yourself from pointless worry and anticipation that will only frustrate you and make you more anxious. Dr. Ben-Ari suggests that applying for more roles while you are waiting will not only distract you from the pressure of your current applications but could lead to more career opportunities that you might have overlooked.
This time between graduating and your first job can feel quite empty and directionless, but it is also an opportunity. There are few other moments when you will have so much free time all at once, so you might as well try and make the most of it. This could involve learning new skills, seeking new experiences and hobbies, or joining voluntary groups. By keeping your mind and body active, you can bolster your mental health and avoid the frustration and helplessness of waiting to hear back from employers.
Create a schedule to give your day structure. You can decide how many applications you will send off each day, and dedicate time to a hobby or activity that will help to improve your mental health and keep you motivated.
Gain additional experience to reinforce your CV. This can be done by volunteering and completing pro bono work, or by court marshalling, where you sit with a judge for several days.
Improve your skill set by completing online courses. There are a wealth of online courses available which can help to build your skills in all sorts of relevant topics from English language and writing skills, to leadership and critical thinking. By continuing to learn and add to your skill set, you’ll be showing employers that you are committed to growing as a professional, making you a more attractive hire.
Visit a courtroom and sit through various cases. This is a great way of gaining courtroom experience without having to negotiate a placement. You can sit in on a wide variety of cases and become more familiar with court proceedings, which will demonstrate your genuine passion for the legal profession.
Keep up-to-date with legal news and developments in industries relevant to your applications. This will keep you mentally engaged and will be beneficial should you make it to an interview stage.
Follow your dream companies on social media such as LinkedIn. This will help you to keep up-to-date with any developments within those companies, which you can tap into in your applications and interviews. It will also allow you to spot any opportunities at your dream companies early, giving you the best possible chance to land that job.
What can be disheartening during this period is seeing your peers and classmates landing enviable roles while you continue to receive rejections. If this starts to get you down, there is nothing wrong with muting them or disabling notifications from social media entirely.
On the other hand, you can use their success to inform your own job search. Try asking them how they landed their new role, and compare your own methods of applying for positions.
Avantika Vaishnav, Marketing Manager at Debut, has commented:
“While graduates wait to hear back about the status of their applications, it would be advisable to invest their free time in preparing ahead! Resources such as YouTube and the Debut blog can help graduates understand where their application could improve. Make a list of common interview questions and practice how you would answer them at an interview much beforehand. This will take the pressure off an interview.
If you get rejected, try asking for feedback. Think about how you can implement the takeaways to avoid repeating your mistakes. If a lack of experience is letting you down, work on developing the experience being sought for your dream role. If you got told that your passion for the company didn’t come through, do more research the next time and incorporate what you have found out as points of discussion in your interview.”
Debut is the ideal place to find a graduate job as in addition to listing graduate schemes and internships across the UK, there are also guides and insight to make every part of the application process easier to tackle.
Gregor Kleinknecht and Anastassia Dimmek of Hunters Law LLP explain what zombie firms are, how to recognise them, and how to manage associated risks.
Zombie firms (“ZFs”) are not a new phenomenon; they have haunted economies around the world for decades, most notably Japan in the 1990s. In the UK, their numbers have seen a significant increase since the Covid pandemic struck: government incentives intended to help companies to weather the effects of the pandemic have contributed to growing their numbers and artificially prolonging their life within the economy.
ZFs are companies which are unable to cover debt servicing costs from current profits over an extended period of time and therefore cannot invest in future economic growth; they are artificially kept alive by Covid support schemes and low interest rates. On the surface, ZFs can continue to look like healthy companies and continue to attract business from customers, suppliers and partners. However, many observers anticipate that a wave of ZFs will enter insolvency and die once interest rates increase, inflation starts rising and government support schemes are phased out. ZFs appear to be more prevalent in certain industries, such as the arts, entertainment and recreation sectors, which have been worst affected by the pandemic.
The Coronavirus Business Interruption Loan Scheme, Coronavirus Larger Business Interruption Loan Scheme and Bounce Back Loan Scheme of 2020 offered government-backed loans to companies of varying sizes, saving many businesses from insolvency. The Recovery Loan Scheme, which replaced them in April 2021 (likely to run until December of this year), was intended to help businesses recover during a post-pandemic transition period. While these schemes may have fulfilled their purpose for many companies, they also provided the ideal breeding ground for ZFs. Insolvency statistics show a drop of 35% in overall company insolvencies in April 2021 compared to April 2019.
Equally, the amendments made by the Corporate and Insolvency Governance Act 2020 to existing legislation, especially the Insolvency Act 1986 and Companies Act 2006, have the side effect of keeping ZFs afloat. A new statutory moratorium process and restructuring plan procedure attempt to rescue companies as a going concern, while some provisions of the Act invalidate contractual termination clauses in certain circumstances. The Act’s temporary measures in relation to the wrongful trading liability of directors and the presentation of winding-up petitions lasted until June 2021.
Aside from stifling the economy’s vitality (which would normally see the redistribution of resources and capital to financially stronger and more flexible competitors), ZFs are a danger to unaware business partners, who may not only be faced with non-payment of invoices, but also a potential claw-back of historic payments once a ZF enters insolvency.
Tools for recognising and managing the risk of dealing with potential ZFs range from publicly available information at Companies House, to a review of contractual clauses of existing commercial trading agreements. There are many red flags which a diligent business can identify in existing relationships with a potential ZF. By remaining in close contact with trading partners, it becomes easier to spot when things are not going well: deteriorating staff morale, low stock levels, erratic payments, requests for longer payment terms, falling profits or a change/resignation of directors and key personnel can all be early indicators of growing financial difficulties. ZFs can also become more contentious and involved in disputes as they struggle for survival.
A review of publicly available information and records filed at Companies House can reveal whether a charge or security over assets has been created, and a look into the submitted annual accounts can highlight increasingly tight margins and growing exposure to creditors. However, this should be a first step only, considering that the information could be nine months old by the time it is filed at Companies House and may no longer reflect a company’s current financial situation.
The best way for companies to protect their business now is to have a hard look at their contractual arrangements: do they already incorporate or can they be amended to include credit and payment terms for cash in advance or on delivery? Is it commercially viable to shorten the period for payment or insert the right to suspend deliveries for non-payment?
It is important to assess the strength of existing retention of title clauses to ensure that the goods delivered will not form part of the insolvent estate once insolvency proceedings commence, and examine whether the contractual termination provisions stand up to scrutiny.
While businesses may primarily fear a non-payment of invoices by ZFs, they also need to be mindful of the risk of potential claw-backs of previous payments made to the trading partner as either a debtor preference or a transaction at an undervalue during possible later insolvency proceedings. It is crucial to collate a paper trail of evidence showing that any payments made to a creditor by a financially troubled company arose from genuine commercial pressure, rather than a preference over the company’s other creditors.
For companies from the EU, which deal with potential English ZFs, and vice versa, the post - Brexit litigation regime has made it harder to enforce European judgements in the UK, and UK judgements in Europe. The Brussels Regulation (Recast) is no longer applicable, and tools such as the European Order for Payment are also no longer available. The effect of the Brussels Regulation (Recast) was to provide clarity and greater speed by governing which court had jurisdiction in civil and commercial disputes and ensuring the recognition and enforcement of foreign judgements.
While the UK still recognises exclusive jurisdiction clauses under the Hague Convention in B2B contracts, the scope of the Convention is much more restricted than that of the Brussels Regulation (Recast). For instance, interim measures such as injunctions and freezing orders do not benefit from reciprocal recognition in the EU anymore.
Furthermore, foreign insolvency regimes work differently and often grant other forms of protection than businesses are accustomed to in the UK. The practical difficulties posed by the new litigation environment make it all the more important to assess existing business relationships realistically and recognise warning signs early – as well as having a thorough review of contractual relations now.
Speaking on the move, Chief Executive Stephen Rosser said: “Our Birmingham office move comes at a really exciting time for the firm and for the team in Birmingham specifically. Prior to the pandemic, we had plans for Birmingham including a more flexible use of our office space, but in the last 16 months we have learnt so much that we have been able to be more adventurous with our plans.”
“Our lawyers and support staff have delivered at higher levels than ever before and have communicated their desire to work flexibly in future. We will deliver this for them and our Birmingham team is leading our move in this direction.”
The new office project has been led by the firm’s Head of Office Rayner Grice: “Over 90% of our staff have told us via our surveys that they want to work flexibly going forward and this has given me the freedom to design our new office for that purpose,” Grice said.
“Staff who prefer and want to work in the office can do so. Staff who want to dip in and out as their needs change are also accommodated. By using a desk booking system and having created a space with a full range of work environments from private booths through to a business lounge, our people can collaborate with one another, socialise or work quietly on confidential matters. Every staff member has different preferences, but our aim is to accommodate everyone in such a way that they can do their best work for our clients.”
Clarke Willmott, which operates a full range of legal services, will relocate to Colmore Row on July 19, as most remaining covid-19 restrictions are set to be lifted.
Following the announcement last week by the Serious Fraud Office that Amec Foster Wheeler Energy will pay a £103m penalty in a Deferred Prosecution Agreement to settle 18 years of corruption allegations, Alex Swan, senior associate in the Financial Crime team at BCL Solicitors LLP, examines the implications of these much-criticised agreements between regulators and companies.
On 1 July 2021, the Deferred Prosecution Agreement (DPA) between the Serious Fraud Office (SFO) and Amec Foster Wheeler Energy Ltd (AFWEL) was given final judicial approval by Edis LJ. This is the tenth DPA the SFO has been able to secure since the DPA regime came into force, and is yet another example of a corporate being able to simultaneously reach resolutions with multiple agencies in different jurisdictions to settle various investigations.
The SFO DPA is the latest in a series of resolutions that AFWEL, now owned by the John Wood Group plc, has been able to achieve. On 25 June 2021, AFWEL entered into a DPA with the DOJ, and a cease and desist agreement with the SEC. It also entered into a leniency agreement with the Ministério Público Federal, the Controladoria-Geral da União (Comptroller General’s Office) and the Advogado-Geral da União (Solicitor General) in Brazil. Whilst the resolutions with the American and Brazilian authorities related to the use of third-party agents to bribe decision-makers at Petrobras to win a $190 million contract in Brazil, the DPA covered the use of third-party agents for bribery and corruption in five different countries (including Brazil).
The Statement of Facts, which sets out the facts underpinning the DPA, is yet to be published in order to prevent any prejudice to the SFO’s ongoing investigation into individuals. However, it is apparent that the period of offending covered by the DPA spanned a total period of 18 years, running from 1996 through to 2014.
A report was prepared by external lawyers to AFWEL’s then-parent company in October 2007 regarding potential corruption in Saudi Arabia, which was subsequently discussed at a Board meeting in November 2007 at which it was agreed that there was no obligation to make any disclosures. The same external lawyers then subsequently prepared: a risk report for Foster Wheeler Ltd in July 2008 about potential corruption in four other countries; a report into offending in Malaysia dated October 2008; and a report into events in Nigeria in 2009. At no time was any disclosure made to any authorities about these issues. Although AFWEL had policies in place designed to prevent the type of offending which took place, those policies were not followed and documents were created that concealed the fact that AFWEL had engaged agents to pay money to public officials.
Pursuant to the DPA, AFWEL will have to pay almost £100 million to the SFO in respect of the offending which had taken place in Nigeria, Saudi Arabia, Malaysia, India and Brazil. AFWEL was also ordered to pay the SFO’s reasonable costs of just under £3.5 million, and for the duration of the DPA Wood is required to enhance and modify its ethics and compliance programme. Whilst no monitor has been appointed, Wood will have to report to the SFO on the work it has undertaken and will continue to take, on its ethics and compliance programme.
There has been much commentary about the lack of judicial scrutiny in the DPA regime of the factual matrix underpinning it. The process has led to a situation where, for example, in the Tesco DPA in 2017 the SoF explicitly stated that three former executives were guilty of criminal offences, although they were all subsequently acquitted. It is therefore welcome that the DPA makes it abundantly clear that it solely relates to the culpability of AFWEL and not of any individual person. Such an important qualification appears as a header on: the SFO’s Case Update page; Wood’s undertaking, appended to the DPA; the DPA itself; and the SFO’s reproduction of Edis LJ’s preliminary and final judgments, dated 25 July 2021 and 1 July 2021 respectively.
The issue of whether a DPA involves any judicial finding of fact has also been resolutely put to bed by Edis LJ’s judgment of 1 July 2021: “In a DPA application, the court is concerned with two areas of factual material: that concerning the commission of the offences; and that concerning the situation and conduct of the suspect after the offences were committed, during the investigation and its current situation. In neither area can the court make any findings of fact. It is dependent on the information with which it is supplied, and relies on the prosecutor to make enquiries and to satisfy itself that the court is being asked to proceed on an accurate statement of the relevant facts.”
The DPA again highlights the importance of the need for the corporate to have substantially changed since the index offending took place. The court was only able to find that the DPA was in the interests of justice, despite the widespread and high-level culture of criminality that had previously existed because AFWEL was now under new management and none of the individuals allegedly associated with the criminality were still involved with the company; in fact, Wood was the second corporate to have acquired AFWEL since the index offending took place.
In considering whether the DPA was in the public interest, Edis LJ had enquired as to what the position had been when Wood acquired AFWEL in October 2017, some three months after the SFO’s investigation had been announced. He was keen to ensure that if the purchase price paid by Wood had been reduced due to the existence of the SFO investigation, then Wood should not obtain a further benefit by the court then further reducing its liabilities under the DPA. However, it transpired that Wood’s offer price had been based on publicly available information and that the SFO’s investigation had not been factored into it because the announcement of the investigation came after the offer had been made.
When assessing whether the terms of the DPA were fair, reasonable and proportionate, Edis LJ confirmed that the principal role of the court was assessing the financial penalty. He has made it plain, though, that this did not mean replicating the role of a sentencing judge – instead, it is the judge’s role to assess whether the fine under the DPA is ‘broadly comparable’ to a fine that would be imposed on a guilty plea: “I take the view that this means that I do not myself set about sentencing AFWEL and only approve a DPA which provides for payment of the sum I arrive at. If that were the right approach, the court would be imposing the penalty and not approving an agreement as to penalty. I consider that the 2013 Act means that a DPA cannot be approved unless the court considers that it includes an agreed financial penalty which is “broadly comparable” to the fine.”
In what should be seen as motivation for corporates to demonstrate that they have substantially changed since the index offending, Edis LJ held that any financial penalty under a DPA “…must make a real economic impact on the company, but there is no purpose in undermining unnecessarily the commercial position of a company which has entirely reformed and which has cooperated in the investigation to the extent it has. It is in the public interest that Wood should continue to trade through AFWEL and its other companies because that trade is not tainted by any crime.”
Disclaimer: The agreement discussed above has no bearing on the guilt or otherwise of any individuals who may in future be charged in relation to this matter. The DPA only relates to the potential criminal liability of Amec Foster Wheeler Energy Limited and does not address whether liability of any sort attaches to any employee, agent, former employee or former agent of Amec Foster Wheeler Energy Limited.
