Understand Your Rights. Solve Your Legal Problems
In-house counsel choosing external law firms say that responsiveness is the most important factor in their decision, shows a new survey by Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals.
The survey of more than 200 in-house lawyers, conducted by Thomson Reuters, found that when deciding whether to instruct a law firm, they valued responsiveness (rated 8.8 out of 10 in terms of importance), understanding of the business and its industry (8.6) and deep specialist expertise (7.6) as the most important factors (see table below).
Thomson Reuters says that the results demonstrate the growing pressure on law firms from clients to be responsive to the client’s agreed needs in relation to a specific matter, to have deep knowledge of the law and, more commercial awareness.
These factors all rank higher than price (7.5), and highlight where law firms may choose to focus their investment in order to have the biggest impact on client experience.
In-house counsel seek responsiveness, knowledge when instructing external law firms
(Importance of factors rated on 1-10 scale)
“There is now tremendous pressure on law firms to understand, agree and keep to, service level agreements with their clients, and to ensure their responses reflect the commercial and wider-industry in which the client operates,” said Samantha Steer, Director, Large and Medium Law Firms, at the Legal UK & Ireland business for Thomson Reuters. “For in-house counsel, these are often the factors that really justify the fees.”
The survey results are released ahead of the ‘Entrepreneurial Law Firm Conference’ to be held on May 16th in London. The event will discuss the factors that are impacting the legal market and the effect they will have on the traditional business model.
“The insights gained from this survey will be of interest to any forward-looking law firm keen to understand how best to serve their clients’ changing needs,” said Samantha Steer. “What clients really want is an age-old question, and an understanding of the buying decisions and behaviours can help law firms to stay ahead of these trends.”
Technology moves up the agenda for law firms and in-house counsel
Thomson Reuters adds that its survey results show legal technology is now moving up the agenda for in-house counsel. Innovative service delivery through technology (rated 5.9 out of 10 in terms of importance) was ranked as a more important factor in choosing a law firm supplier than personal relationships between the firm and senior decision-makers (4.8), corporate social responsibility (5) and size and reach of international network (5.6).
Document automation was highlighted by a number of respondents as being a key area where law firms can add value for their clients. For clients that produce a large number of documents with only small variations – such as employment contracts or non-disclosure agreements – providing technology to automate their production can save in-house lawyers a significant amount of time.
Other legal technology innovations in-house counsel identified as adding value included:
“The ability to show innovation when it comes to delivering legal services is something that is becoming a more important part of a comprehensive commercial law offering,” said Samantha Steer.
(Source: Thomson Reuters)
The Bar Council is giving its backing to the The Lawyer Portal (TLP), a new education resource aimed at those considering a career in law.
The Lawyer Portal has been developed with direct input from experienced lawyers and legal education professionals, and features contributions from the Bar Council and other professional bodies and law firms. It includes free careers guides which highlight the various routes to legal practice and step-by-step guides on the study of law, work experience and training opportunities. In addition, there is advice on applying and interviewing for a career in law.
Rachel Davis, Managing Director of TLP said of the company’s partnership with the Bar Council: “Having the Bar Council on board sends a clear signal to anyone using The Lawyer Portal that the resources they have access to are accurate, up to date and from the professional body that represents barristers in England & Wales. The Bar Council’s commitment to diversity and inclusion reflects our own ambition of a law career being accessible to all, whatever their background. We strongly believe that anyone with great potential should have great opportunity and our platform aims to help make that belief a reality.”
Sam Mercer, Head of Equality & Diversity (Bar Council) added: “The Lawyer Portal will be a valuable source of information for a career at the Bar and other parts of the legal profession. It will allow anyone considering a career in law to look at all the options available to them, what’s involved in pursuing a legal career and case studies of those already working in the sector. Most importantly, the portal will be live, so any new developments or changes to qualifying as a lawyer will be available.”
The Lawyer Portal is the second platform created by The Career Portal. The group’s first venture, The Medic Portal, which is partnered with The Royal Society of Medicine, has rapidly become a highly respected resource, used by 400,000-plus aspiring medics and hundreds of schools across three continents.
With the backing of the Bar Council, The Career Portal is looking to replicate this success in the legal sector, ensuring that the best and the brightest individuals are exposed to all the opportunities available in law.
(Source: Bar Council)
From Brexit to immigration and trade policies, both the UK and the US are currently undergoing huge legislative steps towards a different kind of progress. Regulators are on their feet in anticipation and businesses even more so. Here Michael Hatchwell and Julia Holden-Davis, Directors of Globalaw, talk Finance Monthly through the most recent legal conundrums facing businesses in these nations and point back to the importance of the rule of law.
UK
The present government’s objective whilst dealing with the huge challenge of Brexit negotiations will be to maintain a stable, vibrant and attractive economy that will offer increased opportunity for all, lower taxes (inevitable and necessary to attract wealth and business to compensate for the Brexit factor), a better standard of living, and a more global business outlook. This will be a huge juggling act, especially when the true cost of Brexit becomes fully understood and is actually felt.
Current priority areas for businesses
Brexit
The key current priorities of UK business beyond survival in a difficult and unpredictable global economy are understanding the implications of Brexit and determining a strategy. Brexit has a big impact on both intangibles such as confidence, and tangibles such as movement and availability of the right staff, passporting issues, and creating a new and relevant message for the UK as a whole.
Different businesses will have different concerns, and those involved in the EU financial sector, reliant upon passporting, or who are broadly exposed to the EU market, have some difficult decisions to make.
Reducing Bureaucracy
This is the stated goal of many governments, but given Brexit it is increasingly unlikely. One only has to look at recent tax legislation to understand the challenge.
Regulation and Compliance
Mostly – will it increase or decrease? Whilst needed to avoid another financial crash and in the battle to eradicate fraud, corruption and bribery, regulation and compliance also costs UK industry billions and creates an uneven global playing field, because the same level of regulation simply does not exist in most other countries. This will become a serious issue if the UK is now to turn towards the non-EU part of the world. It is no coincidence that large Chinese and Indian companies have been able to use their vast protectionist, locally unregulated and generally untaxed local markets as a springboard to conquer globally.
Passing the burden of government to business
This is a significant and growing trend. Examples range from requiring regulated entities to report crime and suspicious activity without being allowed to inform their own clients, to introducing rules that have the effect of ensuring that perfectly proper companies cannot open a UK bank account because they do not have a UK resident director. There is and will be increasing pressure on media giants such as Facebook and Google to police effectively their own media or incur sanctions. Trial by media not by law, of companies and individuals apparently not paying sufficient tax although acting entirely legitimately (borne out by the lack of prosecutions), to politicians and even our last PM referring to a well-known comedian and his personal tax affairs, are all evidence of a less disciplined and principled environment.
US
In the US, the government is focused on building confidence in the US economy while also rebuilding the US’ military strength and addressing immigration issues. Each of these items has significant potential impacts on businesses – both in terms of opportunity but also in terms of risk. Within these broad objectives are more discreet goals such as tax reformation, revised energy policies, and an increased focus on both employing US workers and procuring US-made supplies.
Current priority areas for businesses
America First Trade Policy
The current US administration is actively focused on changing the United States’ trade policies. One of the first acts of the current president was to withdraw from the Trans-Pacific Partnership, and the administration has made clear that it intends to renegotiate the North American Free Trade Agreement (NAFTA). Further adding to these policy changes are active steps taken by the administration to impose tariffs or sanctions against the US’ trade partners for treatment deemed “unfair”.
These policy changes also reflect the administration’s current focus on improving the US economy through reinstating jobs, particularly in the manufacturing sector, as well as improving wages.
Changing the landscape of trade agreements and providing incentives (or disincentives) focused on optimizing the utilisation of US-based labour or to purchase US-produced items, will likely both create opportunity and change the risk analysis for local and international businesses.
Changing Tax Requirements
Alongside changes to the United States’ trade policies are proposed tax changes that also implicate businesses. One of these is the Border Adjustment Tax, which in broad terms moves the corporate income tax from its current origin-based application to a destination-based tax. This has significant potential implications for businesses located outside the United States which currently enjoy lower tax rates by virtue of their global locations.
Energy Policies
The Administration’s focus on the energy sector is also significant to businesses. The policy broadly looks to domestic energy reserves with the goal of both providing energy within the US but also exporting energy beyond the US. Revenue from energy production is identified as key to developing and maintaining US infrastructure – from roads and bridges to schools and agriculture. Key focuses of the US government include reducing regulatory requirements which impact the United States’ ability to develop its energy (including changing the focus of the Environmental Protection Agency), reviving the US’ coal industry, and posturing the US to be independent from OPEC and other foreign nations.
Immigration
Immigration remains a key focus area in the US, with businesses already considering the impact on their US-based workers, the availability and accessibility of talent, and the perceived benefits or detriments of locating workers in the US.
For both the UK and the US, these areas all neatly focus us on the critical importance of the rule of law -- the main pillar of a just and successful society.
The pillar of business law is the law itself
The rule of law is the number one imperative for creating a foundation for society in which business can prosper and flourish.
It is the principle that says no man is above the law, including government and leaders. The World Justice Project expanded this to include three more principles which can be summarised as follows.
Laws must be clear, publicised, stable, protect fundamental rights such as the security of persons, property and certain fundamental human rights.
Laws must be enacted, administered and enforced, fairly, accessibly and efficiently.
Justice must be delivered in a timely, ethical and independent manner, with adequate resources and funding and reflecting the make-up of communities represented.
It is easy to see why the rule of law, or perhaps these rules of law are primordial to a successful business environment. It is difficult to identify any country which is sustainably successful which does not adhere to these principles.
The rule of law provides the essential foundation to a successful and prosperous post-Brexit Britain and it is vital that its importance is understood and that the rule of law is protected at all costs form the onslaught which threatens it. Similarly, in the United States, the rule of law must be protected to provide necessary balance and focus in a world with shifting policies, relationships, and focuses.
Michael Hatchwell is a director of Globalaw, a top 10 international legal network, and senior corporate lawyer at Gordon Dadds LLP London. Julia Holden-Davis is also a director of Globalaw and the construction and government contracts attorney practice group leader for Gunster, a United States law firm with a primary focus on Florida business.
We’ve recently learned in the media that thousands of workers, in the UK and the EU, who work zero hour contracts missed out on holiday pay because they were unaware of their employment rights or were life to by employers.
Citizens Advice claims that over 900,000 people don’t know what holiday benefits they are entitled to with their employer. Zero hour contracts pretty much enable employers to hire and not guarantee working hours, which is different to the gig economy.
The problem is, some employers make the most of their employees’ ignorance, and well, some employees prefer zero hour contracts, but are unaware of the laws surrounding. Just this week we also heard that the potential conservative government in the UK would implement many new employment law strategies, but not in regard to the elimination of zero hour contracts, unlike the Labour party, which has promised a ban on zero hour contracts and unpaid internships.
Below Lawyer Monthly hears from several sources throughout the country on the impacts, problems and benefits surrounding zero hour contracts and employee benefits.
Peter Burgess, Director, Retail Human Resources:
Although some political parties have pondered banning zero hour contracts, the fact remains that they are popular with employers and employees alike. The government has pondered reform but has so far not acted.
A good start for any reform would be to oblige employers using such contracts to ensure that their employees are made aware of their rights. Holiday pay should accrue with time worked and the easiest way to deal with this is in the same way as temporary staff, where holiday pay is added to the hourly rate. Alternatively it could be compulsory to show on the payslip the amount of holiday that has accrued. Sadly there will always be employers to cheat their employees and break the law. There is no police body for employment rights, the system relies on individuals to use the tribunal system to get remedy and this is by no means straight forward.
Perhaps the time has come for employers to post notices on Employee Rights in the same way that they are now compelled to post notices about Health and Safety. None of these suggestions will solve the problem but it might help.
Noele McClelland, Employment Specialist and Partner, Thorntons:
We have heard a lot in the news about zero hours contracts yet it still seems that both businesses and individuals do not fully understand what their obligations and rights are. The Working Time Regulations 1998 came into force nearly 20 years ago and gave not only employees, but workers, the right to a minimum amount of paid leave. This is an important health and safety protection which recognises the importance of having time off work for rest and recuperation.
This was initially 4 weeks a year (20 days for people who work full time) and was later increased to 5.6 weeks (28 days) with effect from 2007. We are therefore not talking about new rights. In some cases businesses may be under the mistaken impression that people on zero hours contracts are not entitled to paid holidays but that is completely wrong.
Many such contracts in reality involve individuals working regularly, but even where there are weeks in which an individual does not do any work there is a method by which holiday pay is calculated. This typically involves looking back at the last 12 weeks in which they did work to work out their entitlement.
What is concerning is if individuals are being told by their “employer” that they are not entitled to any paid holidays and they just accept this. From 1st July 2015 any claims for unlawful deductions for wages can only be backdated for a period of 2 years, and in some cases this non-payment could have been going on for years.
Also following the recent mass cases involving holiday pay claims and in particular the case of Bear Scotland v Fulton (which was back to the EAT in December ’16 and the decision is awaited) it was held that if there was a gap of 3 months or more between non-payment of holiday pay then the claim would not be allowed for being out of time (allowing for any extension of time for ACAS early conciliation of course).
This means businesses have to do an audit to see if they have been paying holiday pay or not, and individuals have to bear in mind that the longer they leave it without bringing a claim (particularly if it is ongoing) they may be losing their ability to recover these sums in an employment tribunal.
Emma O’Leary, Employment Law Consultant, ELAS Group:
When zero hours contacts are properly constructed and not abused, many workers actually like them. A true zero hours contract contains no mutuality of obligation – the employer does not have to provide hours and the worker does not have to accept them. The idea is that they are properly ad hoc contracts where an employer gives them work as and when required and they take it when they can. Someone on a zero hours contract can have as many other jobs as they like, giving them the flexibility to work around their own lifestyles or other jobs. It can work well in industries such as care where carers work for a number of care providers, picking up shifts to cover holidays or sickness.
However as we’ve seen in the news recently, zero hours contracts are open to abuse by employers and one of the concerns is that people on zero hour contracts are not receiving holiday pay, either because they don’t know they can claim it, their employer doesn’t know that they should be receiving it or, in some cases, the employer does know but denies holiday to deliberately avoid their obligations.
People on zero hours contracts are, in most cases, considered to be workers. Whilst this does not necessarily afford them the full complement of employment rights, it does provide them with basic rights, one of which is entitlement to annual leave under the Working Time Regulations. Workers are entitled to accrue annual leave based on the hours they work pro rata based on the statutory entitlement of 5.6 weeks.
Whilst it can be a headache to calculate holidays for irregular work patterns, the accepted method is to use a formula. The holiday entitlement of 5.6 weeks is equivalent to 12.07% of the hours worked, or just over seven minutes for each hour worked.
This is calculated by dividing 5.6 weeks holiday by 46.4 weeks worked (52 weeks in the year minus 5.6) and multiplying by 100. Note: It’s necessary to exclude the 5.6 weeks holiday from the calculation as you would not be present during those weeks in order to accrue annual leave.
So for example, if you have worked 10 hours then you will be entitled to 72.6 minutes paid holiday:
12.07% divided by 100 x 10 hours = 1.21 hours (72.6 minutes)
Failing to ensure that all workers receive their annual leave can result in an employment tribunal claim which, depending on time limits, could go back as far as the last holiday year.
Leon Deakin, Employment Team Partner, Coffin Mew:
It comes as absolutely no surprise to me that such a high percentage of workers on zero-hours contracts are not aware of their holiday rights. Whilst there are undoubtedly going to be some businesses that deliberately play the system to save money, the majority of cases I see result from a total ignorance as to how the law in this area works.
I think there is another element of this story which has not been covered and is likely to be relevant. Put simply, calculating holiday pay for temporary workers or those who work atypical patterns, including individuals on zero-hours contracts, can be notoriously difficult. Indeed, I am not ashamed to admit that carrying out complex calculations for clients with staff working tricky patterns has occasionally caused me to throw down my calculator in utter despair, especially when you put bank holiday entitlement into the mix!
This combination of ignorance and complexity is obviously a dangerous cocktail but if that is the case then what is the answer?
For me it is definitely not a ban on zero-hours contracts. Contrary to what may have been suggested, there is a proportion of the workforce that genuinely like the flexibility offered by such an arrangement. There is also a proportion of industry that is prepared to comply with the law and needs to work in this way to maintain a competitive edge or simply stay afloat. Such companies should not be penalised. Accordingly, I think the only workable solution beyond greater education all round would be to introduce a simple statement that an employer must issue at the same time as the written contract outlining exactly what benefits the individual is entitled to. Failure to do this could give rise to a claim and a fixed amount of compensation in the same way that applies for a failure to issue written terms of employment. It would not be unduly onerous time or expense wise to do this; the statement could easily be in a set format. Whilst this would not stop those who intentionally flout the rules, it would raise awareness and make it harder to plead ignorance.
The ‘difficult’ part of the equation is harder to solve purely due to the multitude of patterns that can be worked. Employers can help themselves and the individuals they engage by properly thinking things through in advance and then being transparent as to how they will deal with holiday entitlement. Crucially, in all cases, the contract should state what the method for calculating holiday entitlement is, when this calculation will be carried out and how bank holidays are treated.
Whilst this may seem like a lot of effort and additional admin, it is a necessary by-product of having a flexible work force. If nothing else, a well thought through and drafted contract may save me a few extra calculators each year!
Darren Maw, Managing Director, Vista:
Can we really say that issues of unscrupulous employers and workers that are unaware of their rights are attributable to zero-hours contracts? We think not
Previous criticism of zero-hours contracts has focused on the fact that often individuals are provided with irregular or low levels of work, preventing any level of certainty or security. Now it seems that the focus has shifted to their right not to work.
The right to paid annual leave is of course a fundamental right and one that is worthy of protection. Zero hour workers are entitled to annual leave, (amongst other things) in the same way as regular workers. Provided that the contract provides for a payment in respect of annual leave upon termination, zero hours workers are not disadvantaged.
We should not overlook the fact that some workers may find themselves on the receiving end of ‘dirty tactics’ but that comes down to unscrupulous employers and is not limited to those on zero-hours contracts. When zero-hours contracts are deployed ethically, the flexibility benefits both the employer and the employee but it could benefit from tighter regulatory framework.
Given the on-going conversations surrounding employment law post Brexit and General Election, an annual license for approved organisations that use zero hour contracts ethically could be something the incoming Government could explore.
Any employer that refuses or fails to provide paid holidays is liable under the Working Time Regulations 1998 (‘WTR’). Almost 20 years after the introduction of the WTR, rights such as paid annual leave are well known. Now an endless supply of information about employment rights is available online, with a smart phone and a few spare minutes, an individual can quickly and easily clarify their employment rights. In this respect, individuals are already adequately protected, and the recent extensive litigation regarding annual leave and pay has shown that this issue is not exclusive to zero-hours arrangements.
We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!
Proposals to alter the market rules applying to the individual and small group health insurance markets would likely require changing the Affordable Care Act's (ACA) risk adjustment program, the American Academy of Actuaries said in a recently published issue brief. Loosening the issue and rating rules, incorporating high-risk pools, allowing sales across state lines, or eliminating federal essential health benefit (EHB) requirements could necessitate changes ranging from minor adjustments to major structural modifications.
"Risk adjustment plays an important stabilizing function in the individual and small group markets, leveling out the differences in risk among enrolled populations through payments to and from insurers," said Academy Senior Health Fellow Cori Uccello. "The risk adjustment program reduces incentives for insurers to avoid enrolling people at risk of high health spending, thereby supporting the ACA's protections for people with pre-existing conditions. But some changes in market rules would make it more difficult for the risk adjustment program to operate as intended."
The ACA risk adjustments shift funds from insurers with relatively healthy enrollee populations to those with less healthy enrollees. The model and formulas used to determine those payments would need to be revised under various health policy proposals, including the American Health Care Act (AHCA) that was passed by the US House of Representatives on May 4.
"Some changes, such as incorporating high-risk pooling and increased flexibility in cost-sharing requirements, could require only adjustments to the risk adjustment design," the Academy's issue brief notes. "Other changes, such as loosening or eliminating the EHB requirements and allowing sales across state lines, could greatly complicate the design and effectiveness of a risk adjustment mechanism. If states have flexibility in setting benefit and rating rules, the risk adjustment models and payment transfer factors may need to vary by state."
(Source: American Academy of Actuaries)
Since the NHS was hit with a ransom based cyber-attack last Friday, the health organisation has suffered continued disruption since, but no further attacks.
47 trusts were hit and 11 are still facing issues, leading to further cancellations and delays in seeing patients.
Here below are responses to the attack from reputable sources who voiced their comments to Lawyer Monthly.
Colin Tankard, Managing Director, Data Security Company, Digital Pathways:
But the NHS was not alone, 74 countries were affected including not only hospitals but businesses and others too, including Fedex, Honda the German rail systems, universities and national telco, Telefonica. It would not surprise me if other organisations were affected too but have not publicly declared it.
The malware was delivered through spear-fishing emails which, when opened, triggered a cyber-contagion on the internal network. Being a hybrid design it had a worm element, allowing it to spread through internal systems for maximum reach and effect. What was interesting is that the infected system's settings were scanned to work out the user's language, then displayed the ransom demand in the correct language for the victim. It also changed the desktop backdrop in order to ‘grab’ the victim's attention - no subtlety there!
From reports, it seems the fix was published back in March but, as with many patches, some organisations were slow to update. However, this malware also attacked older Windows operating systems which Microsoft had removed support of years ago, and are no longer supported. This is why the NHS was so affected.
There are many reasons organisations do not follow the latest software releases but what seems to constantly fail, is the thought process around protecting what you have.
Machines running old versions of Windows can be protected in other ways, such as locking the core of the machine down so no external program is allowed to launch or modify the settings. Creating secure 'communities of interest', where core resources are only accessible to selected user communities, and are hidden for all others, including both rogue and good programs. In this way any infection is contained within the community but, if an infection occurs outside of the community, the internal community remains safe. This process requires greater control of users and resources but, we often see organisations that are so poorly organised that users have access rights to data or services they really should not have. This is not only a privacy issue it also means that a breach can quickly compromise the entire network.
The main problem with the hack we saw over the weekend is it that it was brought in by users clicking on a link, or being duped into thinking the message was genuine. It falls on the organisation to protect and educate the user but far too often this does not happen. User education needs to be ongoing to enforce the companies’ policy on data handling or website visits. We have seen an 80% fall in user bad practice when monitoring software, which prompts the user if they are about to breach a company policy, is installed. This is because the majority of users do not mean to do ‘bad things’ but sometimes they simply forget, once reminded they quickly learn!
A second issue is that most malware can stay on the system for up to 200 days before it is triggered. This brings into question how long backups should be held for, as most organisations, at best, keep a backup for a month. What is needed is for monitoring of the core system attributes (its DNA) to look for anomalies, those subtle changes in the systems operating system which are changed by malware, viruses worms etc., and to alert the system managers of the threat. These checks can even automatically quarantine or ‘fight off’ the infection before it takes a grip. This means you don't wait 200 days to know there is something afoot.
Those who have been infected by this malware will no doubt be rapidly downloading the patches and fixes, ‘shutting the door’ and locking everything down.
All businesses should ensure security patches are up to date and ‘kill off’ SMBv1 at the very least, block access to it from outside your network. It's understandable that IT managers with annoying corporate policies and heavy workloads have been forced to hold back patches, or are unable to apply them.
Our advice, update your installations, drop everything and get patching and do something about your users and their random clicking on attachments or links!
Joe Hancock, cyber security expert at law firm Mishcon de Reya:
The malicious software used in the attack infects systems and encrypts their contents – often known as ransomware. These types of attacks have been growing in recent years, but have not been seen at this scale before. The attack can move from system to system laterally, as well as being delivered via malicious e-mails.
Much of the blame for this week's specific problem has been laid on organisations using Windows XP, an operating system that is 16 years old and has not been supported by Microsoft for three years. Whilst people are strongly advised to move away from the platform, Windows XP is here to stay - it is embedded within many devices, from MRI machines in the health service to Point of Sale systems in large retailers which cannot be easily or cheaply upgraded.
There will be a large global investigation into these attacks, and it is probable that some of the perpetrators will be identified. It is unlikely however that all those responsible will be held to account.
As well as an in-depth investigation, we are now likely to see a strong reaction from governments, speeding up the regulation of crypto currencies such as Bitcoin and anonymous payment mechanisms that allow criminals to profit from such attacks. Somewhat conversely, such mechanisms are often the very thing that also allows new digital businesses to thrive.
More broadly, a debate is emerging between large tech vendors and the government, as to where responsibility lies for the disclosure of vulnerabilities. It is likely that the National Security Agency (NSA) had previously identified this issue, but for intelligence purposes, chose not to disclose publicly. The damage caused by it being leaked into the wild is now, unfortunately, all too clear.
Josh Saul, CEO, The Gold Company:
Investment firm The Pure Gold Company has seen a 52% increase in sales since Friday afternoon from NHS workers, Chinese clients and local and international purchasers concerned that a cyber-attack could somehow affect their wealth.
42% of first time buyers have come from people who work within the NHS, with the balance mainly comprising a mix of financial professionals, teachers, retirees and property investors. We’ve had a 32% increase in Chinese first time purchasers reacting to reports that local Chinese ATM’s have been hijacked, and fearing the possibility of a deeper attack on national and international banks. Other clients have cited concerns that Russian and Chinese Central banks could be targeted, and what this could mean in the forthcoming days or months for money held closer to home.
Many of our clients who purchase physical gold aren’t necessarily looking for considerable growth. Safety and security are their underlying motivations. Existing clients and new customers are already concerned that many of our UK banks are undergoing stringent stress tests, and the added fear of a cyber-attack on their wealth is another reason to put some of that wealth into physical gold assets.”
Unfortunately, we are at our weakest when we can’t see our enemies, and this latest attack has incited feelings of fear and unpredictability amongst many of our clients who would rather have a larger percentage of their wealth in something they can see and touch.
Last week saw that giant of British retail the John Lewis Partnership announcing that it is setting aside £36m due to failures to pay the national minimum wage (NMW) to its workers. This is to cover payments which may be due over a six year period. To be fair it doesn’t seem to be intentional but rather a breach as a result of trying to smooth out pay over a year as hours of work could vary from month to month for employees.
What the figures show though is that the costs can be huge. Even for smaller operations. Here Noele McClelland, Employment specialist and Partner at Thorntons, comments for Lawyer Monthly.
If you are found to be in breach you will be issued with a notice of underpayment which includes a requirement not only to make good any underpayment but also to pay a financial penalty which can be up to 200% of the arrears, capped at £20,000 per worker. There are also criminal offences under the legislation which extend to officers and directors of companies and partners in a partnership.
And it is not just the big names which HMRC are targeting. In February the Department for Business, Energy and Industrial Strategy published a list of over 350 companies who were breaching the legislation, which is there to protect our lowest paid workers. The worst offenders were hairdressers, and the retail and hospitality sectors but also included nurseries, care providers, joinery firms, garages and golf clubs.
The questions are how many more are there out there, and how are they getting it so wrong - particularly since the regulations governing the national minimum wage have not massively changed since they were brought into force in 1998?
There is no doubt about it that for some offenders it is entirely intentional and that really calls into question moral and ethical issues. There is also a real problem with vulnerable workers being targeted particularly those who have been trafficked or who are working illegally. But for others the calculation process can be quite complicated.
Accordingly for a number of employers it may simply be ignorance of what can and cannot be included in the calculation of pay which means that they are falling foul of the legislation. However ignorance isn’t an excuse it is their responsibility to ensure that they are following the legislation.
So what can individuals do? Whether you are an employee or a worker the NMW applies to you. If you are unsure raise it initially with your employer. If they do not co-operate you can require them to produce these records which you also have the right to inspect, examine and copy. If they fail to do so you can being a claim against them with the penalty being an amount equal to 80 times the amount of the NMW applicable to you at the time. You can also report them to HMRC who may carry out an investigation. If you are sure you have not been paid it then you have the right to bring a claim in the employment tribunal for unlawful deduction of wages although from July 2015 you can only go back a period of two years. Alternatively you can bring a claim for breach of contract in the civil courts which can award damages going back five years in Scotland or six in England and Wales.
For businesses it is important to undertake an audit to identify whether or not they are paying the NMW, and in particular ensuring that all working time is included in that audit and you are not deducting anything from wages which you are not allowed to. If you identify that you haven’t been then you will need to look at how you will settle this with your employees. Whilst claims are brought by individuals in the employment tribunal often they are reluctant to do so and HMRC and other agencies can carry out an investigation.
Last week Mrs Justice Andrews DBE ruled in the High Court in a landmark Legal Professional Privilege case brought by the SFO that litigation privilege did not apply to any of the documents prepared by an international corporation as part of its internal investigation into alleged misconduct.
In the case, brought against Eurasian Natural Resources Corporation (ENRC), the ruling stated that although the Company anticipated a raid by the SFO and a formal criminal investigation, such measures did not constitute contemplation of adversarial litigation. Further, the Company needed to anticipate actual criminal prosecution, which required an assumption that various unproven allegations could be substantiated, before litigation privilege could apply to the documents prepared by or at the request of its lawyers.
The Judge ruled that litigation privilege can only protect documents which are prepared with the sole or dominant purpose of conducting litigation, and that it cannot protect documents produced with the purpose of enabling advice to be taken in connection with anticipated litigation. The Court further found that the purpose of avoiding - as opposed to conducting - litigation could not be a purpose which engaged litigation privilege.
A spokesman for ENRC stated: “We are very surprised by this ruling and we will appeal today’s decision because the effect of this judgment is that a party who wishes to consult a lawyer in relation to an SFO dawn raid or criminal investigation is not entitled to the protections afforded by litigation privilege.”
Graham Huntley, founding partner of Signature Litigation, which acted for ENRC, commented: “This is the first case in which the Court has had to consider whether litigation privilege is engaged in a criminal investigation involving the SFO. The effect of this decision is that it is much harder to claim litigation privilege in the criminal context than in a civil one. This is unprincipled and illogical.
“In the criminal context the relationship between client and lawyer may involve investigations by the lawyer involving witnesses and others before any formal charges are laid. This Judgment for the first time signals that litigation privilege will be unlikely to protect that legal work, meaning that genuine attempts by clients to investigate allegations will have to be embarked upon knowing that privilege will not cover whatever is produced. It is important to note that this decision was based on a novel interpretation of English Law. Furthermore, while the finding as to the absence of litigation privilege was not said to stem from the nature or terms of the SFO’s ‘self-report’ regime, the decision necessarily has implications for any corporate engaged in a self-reporting process in a regulatory or criminal context.
A source close to the case said: “The unintended consequence of this Judgment may well be that it has a ‘chilling’ effect on the practice of internal corporate investigations and self-reporting from now on, as companies decide to put the onus on the SFO and other similar publicly funded bodies to carry out any investigation.
“The practical effect of the Judge’s finding is that a party which engages in a self-reporting process commits itself to handing over vast amounts of documents before they are produced and before the party has had any opportunity to be advised by its lawyers. It must be doubtful whether any corporate would contemplate self-reporting in those circumstances.
“This Judgment may encourage criminal and other law enforcement bodies to exploit a company’s vulnerability to adverse media and other reporting of wrongdoing by writing to, and requesting, the company to investigate the wrongdoing itself, pay for the entire cost of that investigation and then produce vast swathes of material generated by its investigation to the law enforcement body in question, whether it self-reports or not. Such a development would be an extraordinary development in the criminal sphere.”
Due to the significance of this ruling for the future of LPP and internal investigations, it is expected that the Court of Appeal will wish to deliver a definitive ruling.
White collar crime lawyer Andrew Smith at Corker Binning says: “This a notable victory for the SFO, which will have profound implications on the practice of corporate internal investigations. Companies can no longer afford to assume that interview records with its officers and employees can lawfully be withheld from the SFO and other prosecuting agencies.”
“The SFO’s Director David Green QC has waged a long war against what he sees as unjustified claims of legal privilege. Today’s judgment is a vindication of his approach.”
“There are some surprising features of today’s judgment – not least that the opening of a criminal investigation does not automatically mean that adversarial litigation is in reasonable contemplation. But even if this aspect of the judgment is successfully appealed, the more intractable challenge facing companies will be to show that documents created during an internal investigation – such as interview records – were created for the “dominant purpose” of future litigation. In many investigations this will be impossible to achieve – companies will be unable to assess the prospects of future litigation without conducting interviews or instructing experts, which means that this work is necessarily conducted for a purpose other than its use in potential future litigation. The court can easily characterise this work – as many investigations lawyers do – as ‘fact-finding’, which means it will fall outside the scope of litigation privilege.”
President of the Law Society of England and Wales, Robert Bourns, who said: "Legal professional privilege is a fundamental part of the relationship that solicitors have with their clients - ensuring they can seek legal advice in confidence. Reports of the SFO v ENRC decision by the High Court are alarming, as they suggest an erosion of this vital legal protection.”
"Anything that undermines or inappropriately limits legal professional privilege threatens not just that particular person or case, but the functioning of our whole justice system, which depends on every person having the right to seek legal advice confidentially. The Law Society will be studying the judgment carefully to understand its full implications."
Crowell & Moring LLP has released its third annual regulatory outlook, "Regulatory Forecast 2017: What Trump Means for Business." The report provides in-depth analysis on how the new administration, Congress, and the federal courts are changing the regulatory landscape and what it means for business in the months ahead.
"The first year of a new administration always brings change, but this is no ordinary transition. This administration has extended an open invitation to industry to come to Washington and share its ideas. For businesses with longstanding regulatory concerns and objectives, the opportunity to engage with Washington is now," said Angela Styles, chair of Crowell & Moring and former administrator for federal procurement policy within the Office of Management and Budget at the White House. "Our insights will help businesses understand the shifting landscape and identify the opportunities and risks ahead."
Regulatory Forecast 2017
The Regulatory Forecast provides in-house counsel and business leaders with forward-looking insight on the issues most affecting US and international businesses, including government contracts, antitrust, health care, energy, environment, international trade, cybersecurity, consumer protection, tax, and labor and employment. An infographic highlights the complex path for achieving regulatory reform in Washington.
Feature articles in the Forecast include:
(Source: Crowell & Moring LLP)
The European Commission has proposed some targeted reforms to improve the functioning of the derivatives market in the EU. The reforms provide simpler and more proportionate rules for over-the-counter derivatives to reduce costs and regulatory burdens for market participants without compromising financial stability.
A derivative is a financial contract linked to the future value or status of the underlying to which it refers (e.g. the development of interest rates or of a currency value). Derivatives redistribute risk and can be used both to protect against legitimate risk and for speculative purposes. Most derivative contracts are not traded on an exchange but are instead privately negotiated between two counterparties.
The proposal introduces more proportionate rules for corporates. It re-focusses the scope of the clearing obligation for financial counterparties to include some additional relevant market players while exempting the smallest financial counterparties. It also allows for more time to develop clearing solutions for pension funds. In addition, the Commission is streamlining the application of reporting requirements and making them more proportionate; it is also introducing improvements to ensure the quality of reported data. The changes include measures that could save market participants, and in particular corporates such as energy companies or manufacturers, up to €2.6 billion in operational costs and up to €6.9 billion in one-off costs.
(Source: The European Commission)
