A challenge to the Serious Fraud Office's (SFO) powers to seize and process privileged documents recently failed in a significant ruling in R McKenzie v The Director of the Serious Fraud Office.

McKenzie (the Claimant), who was the subject of an investigation by the SFO, was arrested at Heathrow airport in June 2015 on suspicion of conspiracy to commit an offence contrary the Bribery Act 2010.

The SFO subsequently seized the Claimant's electronic devices (which contained a large number of electronic documents) including; a USB, a Gold iPhone, a Samsung mobile and a Dell laptop.

Pursuant to the seizure, the Claimant asserted that each of the devices contained documents over which he was entitled to claim legal professional privilege (LPP). Whilst items that are subject to LPP cannot be seized by an investigative authority such as the SFO, s50 and s51 of the Criminal Justice and Police Act 2001 authorises the seizure of such devices suspected to contain LPP material where it is not reasonably practicable to separate the LPP from the non-LPP material contained on the device.

The SFO proposed to deal with this in accordance with its Operational Handbook. Currently, the SFO Operational Handbook stipulates that all retrieved information be processed by in-house technical experts by agreeing search terms with the defendants, which are then applied, so as to enable the isolation of a pool of potential LPP documents which could then be reviewed by independent counsel.

The Claimant issued an application for permission to apply for judicial review of the procedure for dealing with material potentially subject to LPP as set out in the Operational Handbook. McKenzie submitted that the approach of the SFO gives rise to a risk that the SFO's investigative team could gain access to LPP material, however the High Court disagreed. It held that that the SFO’s use of in-house technical experts to isolate material potentially subject to LPP was lawful and that it did not therefore need rely on external contractors to do this work.

In his Judgment, Justice Burnett of the Divisional Court held that the “no real risk” test laid down in by the House of Lords in Bolkiah v KPMG [1999] 2 AC 222 was inapplicable since it was “…inappropriate to equate a public body exercising statutory powers in connection with suspected crime with a solicitor who proposes to act against his former client.” The scope of the duty upon a seizing authority was instead “to devise and operate a system to isolate potential LPP material from bulk material lawfully in its possession, which can reasonably be expected to ensure that such material will not be read by members of the investigative team before it has been reviewed by an independent lawyer to establish whether privilege exists.”

Justice Burnett stated: "In my judgment, the procedures set out in the SFO Handbook are not inconsistent with the 2013 Guidelines [Attorney General’s Supplementary Guidelines on Digitally Stored Material (2011) which appear as an Annex to the 2013 Guidelines on Disclosure]." In his conclusion in paragraph 41 of the Judgment, Justice Burnett further stated: "The procedure set out in the SFO’s Handbook for isolating material potentially subject to LPP, for the purpose of making it available to an independent lawyer for review, is lawful. Whilst I would grant permission to apply for judicial review I would dismiss the claim."

The McKenzie ruling was interpreted by the SFO as a ‘landmark High Court ruling’, but in reality, the Divisional Court did no more than uphold the status quo, confirming the legality of the SFO’s existing procedures for isolating material potentially subject to LPP, for the purpose of making it available to an independent lawyer for review. However, the court did emphasise the duty of investigating agencies such as the SFO to "have procedures in place which are intended to prevent investigators reading LPP material and which make it very unlikely that they will do so."

In summary, there should be clear procedural guidance should a member of an investigating team read material subject to LPP: the fact should be recorded, potential conflict should be recognised and steps should be taken to prevent privileged information from being used in the investigation. In some cases, this may require the removal of the relevant investigator.

Whilst the ruling was in favour of the SFO, its significance is to clarify the form and nature of the burden imposed on investigating authorities and their approach to LPP.

(Source: Graham Huntley, Partner, Signature Litigation)

Commenting on the case which has been dropped by Marvel and DC Comics against a British businessman over the legal right to use the word ‘superhero’, IP expert, Tristan Sherliker, associate solicitor, EIP, said:

“This news is great for Mr Jules. However it is also bad news for others who might be in similar positions, as they will never understand and learn from the true outcome of the case. Most likely, the move by Marvel and DC will have been taken to avoid a negative legal decision, which might have caused a more negative reaction and bigger embarrassment down the line.

“DC and Marvel have a history of stopping others from using the word ‘superhero’ despite it being an everyday word. Just because a word is in the dictionary doesn't mean it can’t be part of a brand: just think of the global value of the Apple brand, but it will be surprising for people to learn that two huge comic book publishers, normally competitors, have united to ‘own’ this word and avoid others from using it.

“The real legal position may often never be known. For a small business faced with a big complaint, it is much cheaper to change your name to another word like ‘superstar’ instead of fighting a legal battle.

“While this is a another win in a classic David vs Goliath case, a final decision from the tribunal could have made the judgement much clearer and have achieved a better understanding of IP rights for businesses where, notoriously, there is a lot of confusion.”

(Source: EIP)

In response to further market speculation and stakeholder inquiries, Bayer is publicly disclosing the contents of its private proposal to acquire Monsanto. Bayer has made an all-cash offer to acquire all of the issued and outstanding shares of common stock of Monsanto Company for $122 per share or an aggregate value of $62 billion.

This offer, based on Bayer's written proposal to Monsanto dated May 10, 2016, represents a substantial premium of:

-          37% over Monsanto's closing share price of $89.03 on May 9, 2016
-          36% over the three-month volume weighted average share price
-          33% over the six-month volume weighted average share price
-          Last twelve months EBITDA multiple of 15.8x as of February 29, 2016

The acquisition of Monsanto would be a compelling opportunity to create a global agriculture leader, while reinforcing Bayer as a Life Science company with a deepened position in a long-term growth industry. The combination is expected to provide Bayer's shareholders with accretion to core EPS by a mid-single-digit percentage in the first full year after closing and a double-digit percentage thereafter. Initially, Bayer expects annual earnings contributions from total synergies of approximately $1.5 billion after year three, plus additional integrated offer benefits in future years.

The transaction will be subject to customary closing conditions.

Bayer's legal advisors are Sullivan & Cromwell LLP (M&A) and Allen & Overy LLP (Financing).

BofA Merrill Lynch and Credit Suisse are acting as lead financial advisors to Bayer and support the financing of the transaction; Rothschild has been retained as an additional financial advisor to Bayer.

(Source: Bayer Corporation)

Hillsborough families are being cheated of the compensation that they deserve and will not receive it due to draconian laws which says you can’t claim unless you actually witness a death, says specialist law firm Moore Blatch.

Hundreds of family members have suffered 27 years – almost three decades - of being subjected to the continued reinvestigation of the horrific disaster, which killed 96 people, with tortuous graphic images in the media depicting ‘bodies on the pitch’.

Since the disaster, it has rarely been out of the news and, as a result, the implications are as raw and sensitive now as they were the day after in April 1989. Countless family members and close friends of the victims have suffered from a range of psychiatric trauma since the disaster, such as chronic anxiety, nervous breakdown, compulsive stress disorder, and post traumatic stress disorder. Many survivors have turned to drugs and alcohol and suffered marriage or relationship breakdowns because of ‘survivors’ guilt’ and, in the tragic worst case scenario, at least 3 people have reportedly committed suicide as a result. The issue is compounded by the advent of social media meaning that wherever friends and relatives turn they will see reference to the disaster and their loved ones.

Moore Blatch believes case law, established in 1991 designed to prevent claims, reportedly due to the cost that might result, needs urgent and immediate review. The Alcock v Chief Constable of South Yorkshire Police case also does not encompass the changes in technology which means that people often re-live gruesome events on a daily basis through the graphic depictions of death and injury of loved ones, whether through news or video channels.

Ciaran McCabe, partner at Moore Blatch and specialist in personal injury law comments: “The curse of modern technology is that harrowing events, such as Hillsborough, are often continually surrounding us and, consequently, those closest to the victims can never truly escape the horrific memories that live on. The Alcock v Chief Constable of South Yorkshire Police case no longer reflects today’s society. To suggest that only those people who were in close proximity or witness the death or injury of a close friend or family member suffered psychiatric harm, is to trivialise the scale of the problem. Mothers, brothers or sisters have constantly re-lived this ordeal, and most likely will do so for the rest of their lives, but they are currently excluded from claiming. It is for this reason that this case law needs urgent and immediate review.”

The US senate has passed a bill allowing the families of 9/11 victims to file lawsuits against Saudi officials believed to be involved.

Although the bill, the Justice Against Sponsors of Terrorism Act (JASTA), will still have to pass through the House of Representatives, it has already set in motion a strong feud between the US and Saudi Arabia.

According to the reports, the Saudi Foreign Minister says the bill passing could push Saudi Arabia to withdraw up to $750 billion in US investments. US President Barack Obama has announced he will veto the bill in the House, but according to the BBC, Democratic Senator is "confident" he'd be overruled.

Of the 19 men that hijacked four planes in 2001, 15 were Saudi citizens, but the nation’s officials have always denied any involvement in the memorable incident. A US Commission also concluded, in months following the tragic attacks, that the Saudi government had no involvement.

Families of the victims could now be able to use the courts to hold responsible members of the Saudi royal family, Saudi banks and charities. Until now, a 1976 law has prevented this, as it gave foreign nations immunity to lawsuits from US courts.

The insurance industry is failing to pay the NHS tens of millions of pounds in costs of patient care due to inadequate and outdated recovery legislation, warns specialist lawyers Moore Blatch.

The NHS is faced with a likely £3 billion overspend in the current financial year, and the lawyers believe that it’s unacceptable that legislation that has not been updated for over a decade means that insurers, employers who fail to protect their employee, or any other at-fault party only needs to cover £47,569 worth of in-patient costs incurred by the NHS. What’s worse; they are not liable for any out-patient costs.

Moore Blatch, which specialises in ensuring patients receive appropriate payments to reflect their financial loss from those responsible, or their insurers, believes it is wholly unacceptable that the NHS is having to pick up the bill.

For someone who has suffered a life changing injury, like those involved in the Alton Towers tragedy last year, the cost of a prosthetic limb alone can be in the region of £50,000, without taking into account the immediate urgent care or the ongoing rehabilitation costs.

Trevor Sterling, partner and expert in major trauma and personal injury law at Moore Blatch, comments: “The NHS is being asked to pick up the bill for negligence on behalf of employers and other third parties, many of whom have insurance that should cover this. The whole system needs urgent review, especially at a time when cash for the NHS is so desperately needed. At the very least, the NHS should be able to recover both inpatient and outpatient costs, not one or the other, and ideally the cap should be removed altogether.”

(Source: Moore Blatch)

The UK’s Prime Minister, David Cameron has announced intentions to combat global corruption by creating a global register of foreign firms that own property in the UK.

According to the BBC, Downing Street says the planned register would include companies currently in the UK, potential buyers, and those looking to win government contracts. Firms on the register would be required to publicly disclose their assets, and therefore "corrupt individuals and countries will no longer be able to move, launder and hide illicit funds through London's property market, and will not benefit from our public funds," stated Downing Street.

Around 100,000 properties in England and Wales are owned by foreign companies, and 44,000 of those are properties in London.

David Cameron has also announced that the register scheme will be shared with British overseas territories and with 33 other nations worldwide.

"It does not matter where in the world your company is registered if you own property in London or sell things to government, as part of government procurement, then you have to declare the beneficial ownership, in other words the ultimate ownership of the company," said Matthew Hancock, the UK’s Cabinet Office Minister, according to the BBC.

A summit is also to be announced soon. David Cameron will be hosting government delegates, businesses and civilians at the Lancaster House Summit, including US Secretary of State John Kerry, Nigerian President Muhammadu Buhari and Afghan President Ashraf Ghani.

A group of around 300 economists worldwide have been calling for new rules to be implemented, forcing companies to publicly disclose tax activities country-by-country.

Reports state that a letter, published by the group of economists and sent to world leaders, urges the UK to take the lead in the battle for corporate tax transparency.

Some signatories included among the economist group, led primarily by Oxfam, are best-selling author Thomas Piketty and 2015 Nobel Prize economics winner Angus Deaton. The list also boasts almost 50 economic professors from various British universities.

According to the BBC, the economist group claims the UK is “uniquely placed” to take the lead on this movement, given that a third of the world’s tax havens are sovereignly accountable to the UK.

"We need new global agreements on issues such as public country-by-country reporting, including for tax havens," the group states in the letter.

"Governments must also put their own houses in order by ensuring that all the territories for which they are responsible make publicly available information about the real 'beneficial' owners of company and trusts," it adds.

This news comes on the back of the recent Panama Papers scandal and is one of several calls for tax transparency worldwide. Other knee-jerk reactions were also seen in the past month, including the resignation of Iceland’s Prime Minister and comments made by Apple Inc.’s co-founder on the need for corporate tax transparency.

Winston & Strawn LLP, a leading global law firm, recently announced that two partners have agreed to join its Transportation Finance Practice. Christopher Boresjo and Mark Moody plan to join the firm’s London office in the coming weeks from Simmons & Simmons LLP, where Mr. Boresjo led the firm’s Asset Finance Practice. Messrs. Boresjo and Moody concentrate their practice in the aircraft finance arena, handling a variety of complex finance and leasing transactions.

“We remain focused on expanding our international finance capabilities and our presence in key financial markets such as London,” said Tom Fitzgerald, Winston’s firmwide managing partner. “The addition of Chris and Mark will reinforce our commitment to these goals.”

“Chris and Mark are recognized as top-tier attorneys in the aviation finance space,” said Mats Carlston, co-chair of Winston’s Finance Practice. “Their practice and client base fit squarely within our strategy to acquire and build high-end finance practices globally. Moreover, the addition of their English law capability will significantly expand the reach of our existing transportation finance practice led by Bill Bowers in New York, who, along with Pete Morgan, joined us last year.”

Messrs. Boresjo and Moody represent several of the largest aircraft operating lessors in the world, handling individual and portfolio acquisitions and sales for them as well as providing advice on leasing and other financings. Their other clients include several European financial institutions that are active in the air finance industry, as well as certain European flag carriers.

Mr. Boresjo’s experience involves all aspects of finance and operating leases, sales and purchases of aircraft, cross-border loan and lease agreements, and airline joint ventures, and Mr. Moody has worked on a wide variety of aircraft finance transactions, including tax-advantaged leases, Islamic financings, sale and leasebacks structures, and export credit-supported financings. In addition to London, Mr. Moody has practiced law in Frankfurt and Singapore.

The firm’s London-based Finance Practice has been bolstered significantly in the last year through a string of strategic lateral acquisitions, including Paul Amiss, Rebecca Finn, and Jason Parker in November 2015 and James Simpson and a team of lawyers in March 2015. The arrival of Messrs. Boresjo and Moody will continue this trend of enhancing the firm’s finance capabilities.

(Source: www.winston.com)

With 1 in 5 businesses struggling to handle the increased burden of red tape, is it time for further support for the UK’s small businesses?

Over 1.8 million UK jobs are at risk as 370,000 small businesses plan to cease trading over the next five years, according to a survey commissioned by a newly introduced business for sale marketplace, Bizdaq.

The research, conducted by Opinium, found that over 370,000 small businesses are planning to cease trading in the next five years, with these businesses employing 4.85 employees on average. A further 424,000 business owners plan to exit their business by selling within the next five years; selling being a method which is far more likely to protect jobs.

The survey found that business owners in London are most likely to be thinking about an exit within the next five years. 43% of London small business owners are considering an exit, whilst those in the East of England are happiest running their businesses, with only 11% of owners considering exiting.

Interestingly, the revenue of businesses didn’t have an impact on whether an owner was planning to leave – the East of England had both the lowest exit rate and the lowest average revenue, whilst the East Midlands – which had the highest average revenue – was second only to London for business owners looking to exit.

Sean Mallon, CEO of Bizdaq, said: “It is astonishing, given the government's rhetoric around job creation, that little is being done to preserve the number of jobs at risk within Britain's small businesses. If the government were to make leaving a business easier and promote this as the “norm,” then hard working small business owners could capitalise on their efforts and we could retain over 1.8m jobs - it’s a win-win situation.”

(Source: www.mybizdaq.com)