Understand Your Rights. Solve Your Legal Problems
The real extent of the legal sector’s problem with data breaches has been revealed by a survey which suggests many in the industry delay reporting data breaches, or even ignore them entirely.
Data breaches have hit the news already in 2017 with high profile cases such as mobile phone company Three – where an employee’s password was stolen in March and the data of 200,000 customers compromised.
Then in April, cybercriminals seized 250,000 customer records at Wonga - including bank account details.
However, it seems these stories may be only the tip of the iceberg.
The Crown Records Management Survey, undertaken by Censuswide, polled 408 IT decision makers in companies of between 100 and 1,000 employees across the country.
It provided some shocking results which suggest many of the UK’s data breaches are going unreported.
Some of the statistics for the legal sector are below, with mixed results:
“Whilst the legal sector is doing better than most when it comes to understanding what entails a data breach, there is still a long way to go. The frequency of data breaches that go unreported is especially worrying in a sector such as legal, which handles large quantities of sensitive data,” said Dominic Johnstone, Head of Information Management at Crown Records Management.
“Some of these statistics really are shocking and suggest that data breaches may be far more common and more widespread than many people realise. These results also indicate a culture inside many companies that the best response to a breach is to ignore it or keep it quiet.
“Perhaps this comes from a fear of the loss of reputation which can be experienced when breaches are publicised. Or perhaps it is simply down to lack of a clear procedures and information management in the business. Either way, the implications are serious, and the fact still remains that data breaches must legally be reported within 72 hours.”
The latter will bring in huge fines for businesses which suffer breaches as a result of poor compliance. It also sets a strict timeframe for the reporting of breaches – with fines for those who do not meet them.
“It is absolutely vital that businesses tackle this culture of secrecy because in future unprotected data loss will simply not be acceptable,” Johnstone said. “In fact, it shouldn’t be acceptable now.
“Having a clear data protection and information management programme in place is vital for businesses to avoid these kind of problems. It should be very clear who is responsible for reporting breaches and who they should be reported to.
“Until businesses grasp how much a breach can cost them – both financially and in terms of reputation – this problem is not going to go away.”
(Source: Crown Records Management)
Regularly writing on news surrounding the Serious Fraud Office, here Dominic Carman analyses the success of David Green QC's tenure at the SFO, pointing towards Green’s key moves, role and the poisoned chalice that is the job of being SFO Director.
In one of his more astute observations, Enoch Powell suggested that all political careers end in failure. Of course, the same can equally be said of other careers, not least that of the Director of the Serious Fraud Office. For the present incumbent, the clock is ticking.
Next April, David Green QC will pack up his bags, make his way out across Trafalgar Square, and stroll down Whitehall in his black quilted Barbour jacket. To paraphrase Margaret Thatcher, the seventh SFO Director will be leaving Cockspur Street for the last time after six eventful years – at 64, possibly on his way to do other things, and perhaps with a knighthood to follow for his many years of selfless public service, including spells at the HMRC and CPS.
Green has made the role his own, putting a distinct stamp on the office of Director. I once interviewed George Staple, the third SFO Director (1992-97). Tight-lipped, old school, and patrician, this unworldly former Clifford Chance partner seemed distinctly unsuited to prosecuting fraudsters in Savile Row suits. By contrast, in meeting Green in 2015, it was obvious that he knew his way round a criminal courtroom and the personalities you encounter there. Strikingly different from Staple, Green was garrulous, and behind his genial grin, quietly aggressive.
Before Brexit subsumed everything, the impetus for greater regulation and more effective criminal prosecution of serious fraud had been high on the political agenda. This came in the aftermath of the Lehmans debacle and the ensuing financial crisis: more fraud is usually uncovered during a recession which might not come to light in better times.
Despite media attention straying elsewhere, Green has done his best to ensure that the SFO has never been far from the headlines throughout his tenure. But it has been a double-edged sword.
Green took office with three immediate objectives clearly in his sights: burying the mismanaged investigation into the Tchengzuiz brothers, getting Deferred Prosecution Agreements in place as part of the SFO’s armoury, and prosecuting the fixing of Libor rates by the banks before and during the financial crisis.
Resolving the Tchenguiz affair, which he had inherited from his predecessor Richard Alderman QC, took more than two years. Eventually, the SFO agreed to pay Robert Tchenguiz £1.5m in damages and unspecified legal costs, in a settlement that brought closure to its torrid investigation into the collapse of Icelandic banks. Robert’s brother, Vincent, was earlier awarded £3m in damages and £3m in legal costs by the SFO.
It was not the agency’s finest hour.
Next on Green’s list was Deferred Prosecution Agreements, or DPAs, which became part of English law in February 2014. As agreements reached between the SFO and an organisation which could be prosecuted, under the supervision of a judge, DPAs allow a prosecution to be suspended for a defined period provided the organisation meets certain specified conditions. Applying to organisations rather than individuals, DPAs can be used for fraud, bribery and other economic crime.
The justification for DPAs is to incentivise companies to co-operate fully with the SFO and to save public funds. They are certainly cost effective for very big companies as a way of buying themselves out of trouble since the most notable element is a large fine. To date, there have been four DPAs. By far the largest was Rolls-Royce which paid an eye-watering £497.3m in January 2017 after admitting sustained bribery and corruption in multiple jurisdictions. Three months later, Tesco also agreed a DPA, involving a fine of £129m for overstating profits by £263m in its annual accounts.
Although the UK Treasury has benefited to the tune of more than £600m from these two DPAs, no-one has gone to prison, or yet faced trial. Understandably, DPAs polarise opinion. Green has trumpeted their success, although others are distinctly less keen to celebrate. Instead, their argument runs: yes, big companies plead guilty and pay a hefty fine for their past misdeeds, but even fines on the scale of those levied on Rolls-Royce and Tesco are affordable to multinationals with vast resources. Meanwhile, no-one goes to prison for fraud offences running into tens, or possibly hundreds of millions of pounds.
Then there was Libor. In his final months of office, Alderman had looked at the issue of rate fixing by the banks and decided not to prosecute. By then, he was in no mood for a fresh SFO challenge, having had a pretty unsuccessful stint in his four years as Director. But Green was. Revoking Alderman’s decision almost as soon as he walked through the door, a range of investigations were launched into the banks. It was the issue by which the SFO’s success should be judged, Green told journalists, unwisely.
The results did not match the rhetoric. So far, 19 traders have been charged in respect of Libor and Euribor manipulation with four trials delivering very mixed results: one defendant pleaded guilty, four were convicted and eight were acquitted. The remaining six defendants will be tried in April 2018.
But of the four convictions, at least two are subject to appeal following fresh evidence when when the lead SFO expert witness admitted under cross-examination that he had been texting questions on technical points from the courtroom. And for all of Green’s bravado, not one senior banker has yet to see the inside of a courtroom as result of Libor manipulation. If we are to judge him on that, as requested, then the SFO has not succeeded.
Green will be well aware that Alderman’s reputation as SFO Director was severely damaged by Tchenguiz and by a slew of other mishaps. After stepping down, Alderman gave evidence to a Parliamentary Committee in 2013, which the Telegraph reported: ‘In a grilling before the Public Accounts Committee, former Serious Fraud Office head Richard Alderman was attacked for his “shocking” stewardship of the organisation and forced to admit he had not obtained written approval for the severance packages to three colleagues.’
Alderman’s predecessor Robert Wardle (2002-8) was similarly sunk by BAE Systems. Labelled ‘the Fall Guy’ by the Guardian, Wardle was further described as ‘a man who will go down in history for caving in to political pressure to drop the investigation of the arms giant BAE over alleged bribes to Saudi Arabia.’ In a final sideswipe, the newspaper added: ‘The departing SFO chief, who steps down today, has been made to look like the primary victim of last Thursday's crushing legal judgment in the BAE case. Lord Justice Moses said in almost so many words that Wardle had allowed the course of justice to be perverted.’
As the search for Green’s successor gathers pace, the current SFO Director must be starting to wonder about his legacy. There are forthcoming trials which may yet determine this, not least the four senior defendants in the Barclays-Qatar prosecution, the three former Tesco senior executives and the remaining six Libor defendants.
During his tenure, Green will have been painfully aware of Theresa May’s relentless desire - first as Home Secretary and now as Prime Minister - to shut down the SFO and roll it into the National Crime Agency. As part of the Conservatives doomed election manifesto, that policy appears to have been scrapped.
Like Wardle and Alderman before him, Green must now recognise that the role of SFO Director is something of a poisoned chalice. Avoiding the unmitigated disasters that befell his two predecessors, his actions have nevertheless further exposed the incapacity and ineptitude that have too often characterised the SFO in the public consciousness.
Janine Hutson, Associate Solicitor in the divorce and family law team at Harrison Drury, here explores the latest trends in divorce law and what these could mean for the legal profession.
Calls for a no-fault divorce
Current English and Welsh law states you must prove that the grounds for divorce fit into one of five options; adultery, unreasonable behaviour, desertion, two years’ separation with consent or, five years’ separation without consent.
The problem arises for us, as divorce lawyers, when the reason for divorce doesn’t fall into these categories. The limited options force couples into playing the blame game and proceedings can rapidly become acrimonious and complicated.
It’s argued that the need for a no-fault law, so people can divorce without evidence of blame, will encourage spouses to separate amicably, increasing the number of people heading to mediation and therefore allowing us to truly act within the best interests of our clients.
What will Brexit change?
With Brexit comes a whole host of uncertainty as to how many areas of legislation will change and divorce is no exception. Following Brexit, there are a few options as to what could replace the current legislation. The first, a bilateral agreement drawn up to mirror current legislation, meaning no practical change to the way we act on behalf of our parties.
Alternatively, all European countries could be treated just the same as Non-European countries. Decisions on jurisdiction will be based on how closely a family is connected to a country. This could cause unnecessary strain to the parties who must litigate over which country deals with the divorce.
Divorce and social media
As divorce lawyers, we are encountering situations far more frequently where social media platforms such as Facebook, Twitter and Instagram are providing evidence that we can use in divorce cases.
With social media being so widely used, and with profiles not being quite as private as people may think, Resolution, a body of family lawyers in England and Wales, advises that a wealth of information can be found about people who use social media regularly. Our private lives may not be quite as private as we believe.
People representing themselves
A study carried out by The Times last year showed that around 40% of people have stopped using lawyers in their divorce, this is largely due to the cuts in legal aid and people going through amicable divorces looking to save money and time.
People who represent themselves in legal battles may not get the outcome that they expect or deserve, it can also mean that the party with representation is forced to take on more of the legal costs and proceedings can also be slowed down due to a lack of legal knowledge.
Alternative forms of dispute resolution
Mediation and Collaborative law are methods of alternate dispute resolution that have gradually become more popular with divorcing couple’s due to their efficient and informal nature.
The main principles of mediation and collaborative law is that couples look to resolve all matters in a series of meetings which are attended by both parties and either their mediator or their Collaboratively-trained lawyers.
Mediation tends to take place without any legal agreement whereas in collaborative law everyone involved, be that a solicitor or a client signs an order to bind them to the process and to honour its principles.
For those who are splitting harmoniously these solutions are completely flexible and inevitably mean that the cases are settled in far shorter time periods. As everyone involved has agreed to resolve the matter away from court, many thousands of pounds can be saved by levelling the playing field when using mediation and collaborative law.
Below Maia Cohen-Lask, Associate at Corker Binning, explains the three stages that lead up to a cash forfeiture order, including how cash is seized, prior to discussing the details of the case. Maia also discusses the extent to which cash forfeiture is being expanded by the Criminal Finances Act 2017.
The various asset recovery powers contained in the Proceeds of Crime Act 2002 (POCA) are routinely criticised for being draconian and unfair to those who fall subject to them. Cash forfeiture is one element of this regime, and the recent decision of Campbell v Bromley Magistrates’ Court and Commissioner of Police of the Metropolis [2017] EWCA Civ 1161 was a timely reminder of the lack of protections afforded to those facing the forfeiture of cash believed to be the proceeds of crime.
To understand the significance of the Campbell case, it is necessary to understand the three stages of the process which lead up to a cash forfeiture order:
The Campbell case related to a challenge by the appellant to the initial detention of the cash. He sought to argue that if the initial detention was unlawful, then this should be a preliminary issue to be resolved, before forfeiture was determined i.e. that lawful detention was in effect a “gateway for forfeiture”. The magistrates’ court refused to hear it as a preliminary issue, and judicial review was applied for and refused. The Court of Appeal dismissed the appellant’s appeal.
The significance of this decision, therefore, is that the Court has effectively determined that it does not matter whether or not the initial detention (and by logical extension, seizure) of the cash was lawful or not for forfeiture to take place.
At first blush, this does not appear to be a controversial decision. For cash to be forfeited, the police must be able to prove to the civil standard that it is recoverable property or intended for use in crime. So this decision will not mean that people are deprived of “innocent” cash resulting from unlawful seizures. An unlawful arrest does not mean that a person cannot be prosecuted if there is still evidence which would justify a charge. To preclude a justified forfeiture on the basis of an unlawful seizure might appear to be throwing the baby out with the bathwater.
However, on closer inspection, the ramifications of this decision give cause for concern. Unlike the analogy with arrest and prosecution, seizure and detention are necessary prerequisites to a forfeiture application. Parliament has not given police the power to seize cash on a whim, but has provided a statutory framework within which it must take place. If cash can be forfeited even after an unlawful seizure, does this not circumvent the statutory requirement for reasonable grounds for suspicion? Individuals who have been subject to an unlawful seizure or detention do have the power to judicially review, which could, if successful, result in a return of the cash. However, if an application for forfeiture is concluded before judicial review proceedings, then this will provide no effective remedy.
In conclusion, the Campbell case is demonstrative of how easy it is for the investigative agencies to deprive individuals of assets. With the ambit of cash forfeiture being expanded by the Criminal Finances Act 2017 into moneys held in banks and building society accounts, issues of this nature may begin to trouble the courts with increased frequency. For now, the practical impact of the case is that it will be imperative that anyone wishing to challenge the initial seizure or detention of cash to do so by way of judicial review immediately, in order to ensure that this is litigated prior to a forfeiture application being made.
Once a month, Scott Haley, Family Practice Manager at One Pump Court brings Lawyer Monthly Wednesday Wisdom, and this week he delves into the familiar expression of being ‘called to the bar’.
Being called to the bar has nothing to do with drinking alcoholic beverages, nor that old party classic, the Limbo dance. In fact, it harks back to the traditional layout of a courtroom - and there wasn't a pint in sight.
Originally, courtrooms were partitioned off, or enclosed by two wooden bars. One bar separated the Judges Bench from the rest of the room; the other segregated the area for lawyers engaged in trials, from the riffraff (i.e. the general public), and from those appearing before the court.
Quite simply, Counsel who were called to the courtroom, would go to the “bar”, and be admitted into their delegated section of the room.
Nowadays however, being called to the bar literally means that you are fully qualified to practice as a barrister, and represent another party in court.
M&A specialists from Carey Olsen’s Guernsey corporate team have advised long-standing client and Toronto Stock Exchange (TSX)-listed Avnel Gold Mining Limited (Avnel) on its successful acquisition by TSX-listed Endeavour Mining Corporation (Endeavour) by way of a Guernsey scheme of arrangement.
Endeavour, a premier intermediate gold producer focussed on assets in the West African region, has acquired all of the issued and outstanding ordinary shares of Avnel in exchange for the issue of new Endeavour shares.
Avnel is a gold mining, exploration and development company with operations in southwestern Mali in West Africa. Its focus is to develop its 80%-owned Kalana Main Project from a small underground mine into a low-cost, high-grade, open pit mining operation.
The Carey Olsen team advising on the US$122 million deal was led by partner Tony Lane and included senior associate Arya Hashemi and associate Jamie Oldfield. They advised Avnel on the Guernsey aspects of the acquisition, which was effected by way of a scheme of arrangement approved by the Royal Court of Guernsey. International corporate law firm Blake, Cassels & Graydon LLP provided onshore counsel to Avnel from Toronto.
Mr Lane said: “This was a complex and interesting transaction for our team to advise on, necessitating a novel approach to the scheme documentation so as to satisfy the requirements of Canadian and US securities laws, as well as meeting the requirements for a Guernsey scheme of arrangement. In addition, as the Takeover Code did not apply to the transaction, the parties had more freedom to negotiate commercial terms than would typically be the case for a Guernsey takeover.
"The deal is the latest in a string of public takeover transactions for the Carey Olsen M&A team this year and also demonstrates the firm's market leading expertise in advising listed resources companies registered offshore."
(Source: Carey Olsen)
A change is taking place in the way we understand the link between access to justice and the rule of law, according to Chair of the Bar, Andrew Langdon QC, who recently commented on the Bach Commission’s report, The Right to Justice.
Andrew Langdon QC said: “Change is afoot. This report is part of a shift in how legal aid is being discussed. Lord Bach makes the important point that the rule of law and legal rights do not mean much unless citizens are able, through the legal system, to have them upheld, and that cuts to legal aid have made that impossible for many, especially the most vulnerable in society.
“The report, to which the Bar Council contributed, echoes the observations made by Lord Reed whose recent UNISON (employment tribunal fees) judgment said, 'The constitutional right of access to the courts is inherent in the rule of law.'
“As we are saying to politicians and policy-makers this week and next at the party conferences, if the rule of law is not merely a slogan, governments must act to restore access to justice which has been denied to many. We therefore whole-heartedly support the commission’s call for a simpler and more generous assessment scheme for civil legal aid in order thereby to restore access to justice.
“Many of the proposals put forward reflect the concerns raised by the Bar over the years. These include shrinkage of the junior Bar, the removal of entire areas of law from the scope of legal aid and the growth of advice deserts together with the loss of expertise and the availability of legal advice in areas such as housing, immigration and debt.
“The Bach Commission’s report should be essential reading for those responsible for undertaking the Government’s long-awaited review of LASPO.”
(The Bar Council)
Below Andrew Miller QC, Civil and Commercial Mediator at 2 Temple Gardens, discusses with Lawyer Monthly the issues surrounding mediation, and what parties should do to maximise chances of success when entering into alternative matters of dispute resolution.
Lawyers have long been aware of the need to encourage their clients to consider the alternative dispute resolution arena. The possible costs consequences for a successful party that fails to engage are equally familiar to all those who practice in the field of dispute resolution. The Courts have been fairly consistent in this respect, namely that ADR, and in particular mediation, is to be encouraged. However, 2017 has seen the Court of Appeal sending out mixed messages on the question of parties’ obligations to engage in ADR and in particular mediation.
The Court’s guidance on the use of mediation can be traced back to 2004 when they robustly encouraged ADR in Halsey v Milton Keynes General NHS Trust [2004] 1WLR 3002. However, the Court’s view that the refusal to participate in ADR could result in costs sanctions was partially undermined by placing the burden on the unsuccessful party to show the successful party had unreasonably refused to engage.
It took nine years before the Court of Appeal again gave detailed consideration to ADR. In PGF II SA v and - OMFS Company 1 Ltd [2013] EWCA CIV 1288, Lord Justice Briggs determined that silence in the face of an invitation to participate in ADR was - as a general rule – unreasonable conduct, regardless as to whether a refusal would have been reasonable.
Briggs LJ justified this extension of the Halsey reasoning on the basis that it would always be difficult to belatedly investigate whether a refusal to participate in ADR could be justified. Briggs LJ characterised this as an important message to civil litigants not to ignore a serious invitation to participate in ADR.
In January 2017, the Court of Appeal was again confronted with the issue of the parties’ obligations in respect to ADR in the case of Thakkar & Anor v Patel & Anor [2017] EWCA Civ 117. In Thakkar, In Thakkar, a claim and counterclaim between a landlord and ex-tenants over dilapidations the trial Judge criticised both parties for their failure to engage in mediation. However, criticism was greater towards the Defendant, who overall financially was the losing party. What distinguishes this case is that despite the absence of a refusal to mediate, the Judge at first instance found that the Defendant’s actions in dragging his feet prevented mediation from taking place. Thus, a finding of fact made by the Judge was that if the parties had entered into mediation, it would have resulted in the settlement of the action.
On appeal, Lord Justice Jackson agreed with the trial Judge, stating “he would be astonished if a skilled mediator failed to bring the parties to a sensible settlement.” Jackson LJ sent out his own message to court users, namely, that where mediation is appropriate “it behoves both parties to get on with it”, and that a failure to do so would justify costs sanctions.
The messages from the Court of Appeal over a 15-year period were clear and consistent in respect to potential costs sanctions for parties who failed to embrace the ADR process. At least, it seemed that way until May 2017.
In Gore v Naheed & Anor [2017] EWCA Civ 36, the issue of a party’s obligation to enter into mediation again found its way to the Court of Appeal. On appeal, the Defendant argued that the Claimant should have been penalised on costs given his refusal to mediate. The matter came before Lord Justice Patten, who took a different view to Brigg LJ’s general rule, and stated: “I have some difficulty in accepting that the desire of a party to have his rights determined by a court of law in preference to mediation can be said to be unreasonable conduct particularly when as here, those rights are ultimately vindicated.”
Is this a volte-face by the Court of Appeal? The short answer is no. It is certainly a mixed message compared to the Court of Appeal’s strong comments in Thakkor. However, Gore was not a case where a party had either failed to respond to a request to mediate or failed to engage at all with the process. Crucially, the question as to whether or not it was reasonable to refuse to mediate was raised and adjudicated upon at first instance. The trial Judge had found that the refusal to mediate was reasonable in the circumstances; therefore, the Court of Appeal would have had some difficulty in amending the costs award made in favour of the winning party.
So, where does this leave practitioners when advising their clients on mediation as part of the litigation process? In my view, the Gore case has changed nothing. The primary consideration for all practitioners should be the litigation risk of a court making a costs sanction against a successful litigant, in the event of a refusal or failure to engage in ADR and mediation. It remains the case that sanctions are not automatic. However, it is equally clear that the onus is on any party who does not wish to participate in ADR/mediation to spell out reasons for refusal. A failure to do so will likely lead to a finding of unreasonable conduct on the part of that litigant.
The Court of Appeal remains a strong proponent for ADR and mediation. This was echoed in the recent case of Emojevbe v Secretary of State for Transport [2017] EWCA Civ 934 in July 2017. The Court allowed the Claimant’s appeal of a summary judgment in favour of the Defendant. However, Lord Justice Lloyd Jones sounded a warning to the Claimant in respect of the merits of his case and therefore the costs risks he faced if the matter proceeded to trial. That warning included a strong encouragement to the parties “to attend mediation as a route to achieving a settlement without further court proceedings.” In short, Lloyd Jones LJ expressed the Court of Appeal’s continued view that using mediation as an alternative or adjunct to the litigation process may be, and often is, the preferred course of action.
The messages may have been mixed this year, but closer inspection reveals that the Court of Appeal clearly remains a major proponent of ADR and mediation.
Legal specialists are urging Government to do more to protect older people and help them plan ahead for later life. A survey of SFE (Solicitors for the Elderly) lawyers, whose members specialise in advising older and vulnerable clients, found that 80% of lawyers think there are not enough safeguards in place to protect people from financial abuse.
The results come weeks after SFE raised concerns about proposals to allow people to make a will using texts and voicemails. The organisation has also previously raised concerns about the risks of DIY tools for creating powers of attorney.
The survey also found that 99% of SFE members feel the Government ignores the advice and views of professionals on key industry issues, such as the consultation on probate fees last year which saw the Ministry of Justice ignore the 92% of responses rejecting the proposed fee increase.
SFE is a national membership of over 1,500 lawyers providing specialist legal advice for older and vulnerable people and their families.
Amongst other challenges, members identified further impacts of the care funding crisis as the biggest issue current for older client law.
Lakshmi Turner, Chief Executive of Solicitors for the Elderly, said: “The message from our members to Government is clear – more needs to be done to protect people from the risks associated with creating powerful legal documents.
“Whilst we welcome the digitalisation of legal systems that are designed to increase information and accessibility for people, this should not be at the expense of consumer safeguards.
“Many of our lawyers have seen an increase in cases of financial abuse over the last few years and there is some concern that this will continue to rise following the introduction of DIY and online tools for creating powers of attorney. As the Law Commission goes to consultation on fresh proposals to digitalise wills later this year, it’s more important than ever for Government to consider its responsibility to protected consumers, particularly the older and vulnerable.
“The opinions of professionals on changes to legislation and systems they deal with on a daily basis are extremely important, and should be taken into account. We were disappointed to see the lack of consideration of professional feedback on the probate fee consultation last year. We will be monitoring this issue closely, along with submitting a full response to the consultation on wills, with client safety as our main priority.”
(Source: Solicitors for the Elderly)
