Understand Your Rights. Solve Your Legal Problems
Following the UK’s exit from the EU Single Market and Customs Union, the formerly free trade between Britain and EU member nations was no longer possible. The EU’s food rules require border checks when certain food and agricultural products, such as milk and eggs, arrive from non-EU countries. This raised issues for trade relations between Northern Ireland and the Republic of Ireland, the UK’s sole land border with an EU member nation. All parties involved wish to avoid the return of a “hard border” between the two countries, which would involve the use of cameras, border posts and checkpoints with the potential to be targeted by paramilitary groups.
The Northern Ireland protocol was introduced as part of the 2019 EU-UK Withdrawal Agreement as a means of preserving the soft Irish border while complying with the two blocs’ new trade relationship. It allows for a continuation of the free flow of goods between Northern Ireland and the Republic of Ireland that was standard prior to Brexit. To facilitate this, when goods arrive in Northern Ireland from the rest of the UK (England, Scotland and Wales), they are checked against EU rules at the port where they arrived.
The new arrangement has necessitated the hiring of new customs agents to address a backlog of goods being transported across the Irish Sea, and has restricted what some supermarkets and other produce sellers are able to supply. The protocol has also not yet been fully implemented, with more checks on British goods expected to increase costs once the grace period ends. There is disagreement between think tanks on just how much disruption has been caused as a result of the protocol and whether or not its existence is a net cost or benefit to Irish trade.
The new Northern Ireland Protocol Bill proposes a fundamental shift in the way trade is conducted between Great Britain and Ireland. Its core premise is the creation of separate lanes for British goods imported to Northern Ireland, with a “green lane” exempt from checks and customs controls established for goods intended for Northern Ireland only and a “red lane” for products going to the EU – including the Republic of Ireland – which will be subject to full checks and paperwork.
Beyond the issue of trade with the Republic of Ireland, the bill also gives UK ministers more power to alter tax and spending policies. Under the protocol, Northern Irish businesses currently follow EU rules on state aid and VAT, limiting government payments made to assist firms. The bill would enable the government to remove those limits. The government is also seeking to alter current arrangements so that disputes over the Northern Ireland Protocol are “resolved by independent arbitration and not by the European Court of Justice”.
The protocol has not yet been fully implemented, with more checks on British goods expected to increase costs once the grace period ends.
The largest unionist party in Northern Ireland, the DUP, is supportive of the bill, and is currently refusing to participate in the Northern Ireland Assembly until its concerns with the protocol have been resolved. Having come in second place in the May elections behind nationalist party Sinn Féin, the power-sharing government cannot be formed without its support.
Some MPs and other critics of the government’s move have taken aim at the Northern Ireland Protocol bill for its deliberate contravention of the agreed terms of the EU-UK Withdrawal Agreement. In a statement in Parliament, former Prime Minister Theresa May condemned the passing of the “illegal” bill as liable to diminish the UK’s standing in the eyes of the international community.
Others have argued that the bill is legally permissible in international law. The most common pro-bill argument cites the Article 16 provision of the protocol, which allows for unilateral safeguarding measures to be undertaken against the protocol if it leads to “serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade”. The protocol provides no guidance as to what qualifies as a “serious” difficulty or a “diversion of trade”, though the UK government stated in July 2021 that it believed the threshold had been met. To date, however, it has not begun the process of activating Article 16.
Whether the bill constitutes a breach of international law or not, EU member states who perceive it as such will likely have few options for recourse. As a warning, the EU has restarted legal proceedings against the UK for alleged breaches of the protocol, with the possibility of further measures to be enacted later – such as the imposition of tariffs or the termination of the entire Brexit deal within one year as a “nuclear option”. With both the UK and EU economies already in a vulnerable position and unenthusiastic about a trade war, however, the only certain damage is likely to be dealt to international perceptions of the UK.
While the Northern Ireland Protocol Bill has cleared its first legislative hurdle, it is still far from settled law. The opposition and the 70 Conservative MPs who abstained from the recent vote will have an opportunity to support amendments stripping the bill of some of its more contentious elements.
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The government has set a condensed three-day committee stage for review of the new legislation – a process that typically takes between two and three weeks – signalling an intention to advance the bill through the Commons before the mid-July recess. Despite this, there is every chance that the end state of the bill after passing committee and the House of Lords will be much diluted from its current form, and a high likelihood that the Lords will slow its passage for several months.
Conservative MP Simon Hoare, who chairs the Commons Northern Ireland Committee, has predicted that the final bill may not pass until next spring. Lawyer Monthly will continue to track the status of the bill as it passes through Parliament, as well as any further legal actions undertaken by the EU in response.
We hear from Joanne Taylor, partner in Magrath Sheldrick’s immigration team, who sheds light on the state of these and other UK visa routes and the wider challenges facing businesses and immigrants in the country.
The new Global Business Mobility (GBM) visa routes came into effect on 11 April 2022. For the most part, this is a rebranding of existing Intra-Company Transfer and Sole Representative of an Overseas Business visa routes, with some tweaks. The Secondment Worker route opens up more options for businesses to transfer individuals not currently employed by them overseas to work on a contract in the UK.
With the introduction of the Skilled Worker (SW) route in December 2020, which has lower salary thresholds and a pathway to settlement, it is unlikely that the GBM visa routes will be attractive to most UK businesses, other than in very specific circumstances. However, it does provide options to transfer existing employees into the UK faster than under the SW route (as there is no need for a defined CoS and no need for the English Language requirement) and then potentially switch them once within the UK if they intend to live in the UK on a long-term basis.
The GBM route contains five immigration subcategories for individuals to come to the UK for the purpose of business activity. These routes do not lead to settlement in the UK. They are as follows:
It is unlikely that the GBM visa routes will be attractive to most UK businesses, other than in very specific circumstances.
These new routes are arguably necessary to provide greater clarity around the activities and business objectives that can be pursued in short-term work categories. Global Business Mobility provides an overarching framework that covers a lot of business needs. It can be developed and flexed over time as the labour market evolves with the “Global Britain” (post-Brexit) policy initiatives. Generally, the immigration process is the same for each of the sub-categories, with increased reliance on biometrics and digital application.
This route is for recent graduates of top global universities following the successful completion of an eligible course of study equivalent to UK bachelor’s degree level or above within the previous five years. There is no need to have a job offer in the UK to apply for the visa. The initial permission is granted for two years for applicants relying on a qualification equivalent to a UK Bachelor’s or Master’s level degree, or for three years where the applicant holds a qualification equivalent to a UK PhD. There are no extensions and no route to settlement.
This route aligns with the UK’s ambition to attract talent from around the world and will provide businesses with access to top graduates as part of the talent pool. It will allow them to be hired on a temporary basis in the UK. However, the lack of extensions or a route to settlement may not be attractive to individuals and sponsorship under the SW route will therefore be required to retain the individuals in the country over the long-term.
Whilst the changes are not as radical as the SW scheme (introduced in December 2020) or completely in line with the Migration Advisory Committee’s recommendations (for an ICT scheme to lead to settlement), the changes will enable our clients to access a wider range of talent from outside the UK. We are seeing an increase in immigration activity from a wide range of clients due to many factors including Brexit and the competition for global talent.
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I would categorise the challenges into three main areas:
We are often involved in advising large multinational companies in relation to strategic options for senior hires in the UK. Additionally, Magrath Sheldrick have been involved in lobbying the government on changes to immigration rules in response to our clients’ needs and feedback on existing arrangements. For example, during the pandemic we were central in advising in relation to concessions for the doctors and nurses in the NHS. We aim to be strategic advisers as well as service providers.
Joanne Taylor, Partner
22 Chancery Lane, London, WC2A 1LS
Tel: +44 020-7317-6765
Fax: +44 020-7317-7677
E: joanne.taylor@magrath.co.uk
Joanne Taylor is a partner at Magrath Sheldrick LLP with over 10 years’ experience in corporate immigration, assisting many large and medium enterprises with all their UK Immigration needs.
The Immigration department at Magrath Sheldrick LLP is headed up by esteemed lawyers Chris Magrath and Ben Sheldrick and has consistently been recognised by Legal 500, Chambers and Partners Guide to the Legal Profession and other recognised legal directories as a top-ranked immigration practice. It was one of the first designated “business immigration” departments in the United Kingdom. As a firm, Magrath Sheldrick has three decades of experience in providing advice and assistance in all areas of immigration and nationality law.
Global Immigration Law founder Emel Yilmaz outlines the changes in this feature for the benefit of companies and prospective employees alike.
The Sponsor Licence Route (formerly Tier 2 sponsor licence) enables UK employers with an appropriate sponsor licence to recruit or continue to employ skilled non-British or Irish citizens in a specific job. If a UK-based organisation needs skilled workers for the growth and expansion of their business which necessitates the hiring of foreign workers, it needs a sponsor licence.
Once an organisation acquires a sponsor licence, the organisation is officially permitted to employ skilled overseas nationals for job positions. The organisation will issue a Certificate of Sponsorship for these employees, which legitimises their employment as foreign workers; this helps organisations to retain staff for a longer duration, providing certainty and relevant skills to their business. At the same time, the Home Office relies on the sponsorship regime to prevent illegal working and misuse of the immigration system. This means that the sponsorship (according to the UK’s courts and laws) is a form of a relationship or a bond that shows trust, allowing licence holders to act as gatekeepers to help individuals become employed in British organisations.
In 2021, the Home Office proposed some vital changes to the process of obtaining a sponsor licence following the introduction of a brand-new points system. A white paper provided by the Home Office contained proposed guidelines for sponsors to follow a revamped plan and comply with the new changes. The main goal behind making these changes was to improve and modernise the system of sponsorship in the UK to better enable foreign employees to commence their duties as soon as they can, without delays.
If a UK-based organisation needs skilled workers for the growth and expansion of their business which necessitates the hiring of foreign workers, it needs a sponsor licence.
It is also worth mentioning the new ‘Scale-up’ visa. This route was initially announced in the Spring Budget, with a policy paper entitled ‘UK Innovation Strategy: Leading the future by creating it’. The new Scale-up visa was included as part of its Innovation Strategy, aimed at “opening the UK’s borders to top talent”. The route will be open to people who have a job offer and a salary of minimum £33,000 from a “scale-up” company without the organisation needing to obtain a sponsorship licence. To provide a job offer to these highly qualified candidates, a company or organisation should have an annual average revenue and employment growth rate of more than 20% over a three-year period and a minimum of 10 employees at the start of this three-year period.
The new route enables higher-skilled applicants to apply for a fast-track visa, ensuring greater flexibility in changing employers and access to settled status in the UK after meeting the requirements.
In its previous incarnation as the Tier 2 sponsor licence, the sponsorship system helped UK HR departments to hire employees based on their needed skills and qualifications. According to the Office for National Statistics, there has been an increase of 9% among firms seeking to sponsor new employees as part of their teams. As of 2021, there were more than 33,952 UK-registered organisations interested in hiring new talent from overseas. Since this number is likely to increase in the coming decade, there is a vital need to improve and streamline the immigration process to help individuals enter the country. Therefore, the 2021 guidelines and processes for obtaining a sponsor licence have been changed.
Moreover, in recent years and especially during the pandemic, it has been observed that the demand for skilled workers increased, driving demand for foreign and Irish workers to meet firms’ growth and enhancement goals. Once an organisation is able to sponsor a deserving individual, skilled people can join new jobs in the UK without hurdles. The major changes outlined above were made to the licence policy with the shift to a new ‘skilled worker’ route from the former ‘Tier 2’ path. The new route is less restrictive compared to its processor.
Due to the disruption caused by the COVID-19 outbreak and subsequent lockdowns in the UK, the Migration Advisory Committee (MAC) issued a report on the impact of the pandemic on employment status. This has meant that that changes to business routes could be implemented by the MAC in 2021 after the first few waves of the COVID-19 pandemic.
In recent years and especially during the pandemic, it has been observed that the demand for skilled workers increased
According to LNB News, in June 2021 the Home Secretary of the UK presented a “legal migration and border control strategy statement” before Parliament to legalise the new migration rules for 2022 and onwards, with the aim of ensuring a digital-by-default system by the start of 2024. There were several major announcements made for the purpose of making changes to the existing rules. For example, new categories have been defined in the new immigration laws to define the entry and stay of immigrant workers in the United Kingdom. This refers to a brand-new points-based system introduced in spring 2022 with particular consideration being given to highly educated, skilled, or competent employees. This means that employees who are already holding a job in the UK with a skilled worker rank will have access to a fast-track system.
Moreover, the ‘’Innovator’ route has also been changed and improved. The new Innovator Endorsement Model has been enacted with an aim to promote the new innovator business model and thereby tap into the growth potential of the country. For this purpose, an 'International Sportsperson' system will be introduced that will likely eliminate the existing Tier 5 and Tier 2 sport routes. Moreover, changes in the Global Business Mobility route will also take place. This shows that the immigration department is extremely keen to revise its existing routes no later than spring 2022. The Migration Advisory Committee will also provide more recommendations regarding intra-company routes prevailing in the country so far.
Furthermore, arrangements and amendments have also been made to the existing system in order to ensure that any overseas business routes are optimised for establishing branches in the UK. The online application process has also been improved to ensure the convenience of employees. Applications can be made using a digital-default system available online, thus eliminating the need for many employees to visit physical offices to apply for visas.
Arrangements and amendments have also been made to the existing system in order to ensure that any overseas business routes are optimised for establishing branches in the UK.
In addition, the process has been streamlined in a phased manner. For EU applicants, the ‘chip checker’ is used for certain categories. For non-EU citizens, the biometric provision has been added and increased. All graduate route applicants will also be required to file their application via the online system. If and when their applications are approved, they will receive a biometric residence permit that will authorise them to travel to the UK for the purpose of work (according to Richmond Chambers 2022).
On top of the graduate route, the International Sportsperson routes are also improved and amended. For instance, the former route contained several questions to be answered on application forms. The number of questions is reduced in the current system in order to help applicants flexibly meet the requirements of the immigration department. This means that applicants with GCSE/A Level or Scottish Higher in English need only prove that their ability to speak and interact in English is not below the requirement to succeed. In some cases, the system also provides an opportunity to applicants to apply and upload their forms and documents from home.
In family and private life routes, a similar approach will be used to streamline the process more easily. This means that significant changes to sponsorship schemes have also been introduced in the light of the new principles:
Electronic travel authorisation will also be made possible for Irish and non-British people, according to the white paper. These will be applicants who do not hold a visa prior to 2025. By summer 2021, the paper states that all Border Force staff can use the technology to check the names of the applicants who have applied through the system and are given a status under the EUSS.
Although the new route of obtaining a sponsor licence is structurally similar to the old Tier 2 route, there are many differences that organisations should consider. In the MAC’s 2018 report, for instance, it was stated that the annual limit on certain sponsorship certificates had been suspended. Applicants were advised to make a request on the fifth day of each month and must wait until the next month to receive a response.
The criteria of the system have now been strengthened as part of the new points-based immigration system. Since many employers were not able to sponsor skilled professionals last year due to reaching the cap, many nurses and healthcare professionals struggled to enter the UK. Because there was a huge pressure on employers to tackle monthly allocations, the government was forced to disqualify doctors and nurses using the post-Brexit immigration system. Now, however, the total time taken to process the sponsor licence has been reduced to almost four weeks. The sponsor routes have also changed in the new latest guidelines to reflect the distinction between ‘workers’ and ‘skilled workers’.
The criteria of the system have now been strengthened as part of the new points-based immigration system.
As mentioned, the ‘workers’ and ‘skilled workers’ routes are vital for companies in the UK that depend on the sponsorship of foreign workers. They are an essential step towards hiring non-British or Irish workers to meet the ongoing shortage of skilled and unskilled labour. For work purposes and working in the United Kingdom, these are the safest and most popular routes for all overseas recruits to follow. The routes are also applicable to follow for non-British employers if they want to hire any citizens from outside the United Kingdom.
The requirements of eligibility for non-British companies are non-exhaustive and the skilled worker option also provides significant opportunities for employees to settle in the country for a longer period. The post-Brexit points-based immigration system is less restrictive than Tier 2 and meets a lot of obligations. For example, the annual limit for obtaining a Certificate of Sponsorship has now been suspended. Moreover, in the previous system of Tier 2, the RQF Level 6 requirement compelled skilled workers to have at least a graduate level education or possess an A level or RQF Level 3 qualification. There is also further good news for skilled workers in that the former Resident Labour Market Test has also been excluded from the criteria to obtain a licence. However, the minimum wages guaranteed under the previous system were slightly higher; they have now been reduced from £30,000 to £25,600.
In addition to these changes, more amendments have been incorporated to the process of securing a sponsor licence. For example, “a length of stay of six years” has been removed as a requirement, in addition to the 12-month cooling-off period. It is possible to switch from intra-company procedures and pathways.
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On 1 December 2020, the Tier 2 category that had been in use for many years was fully eliminated and replaced by the latest guidelines, allowing skilled workers to enjoy a streamlined process to obtain their sponsorship licences. Existing or current Tier 2 licence possessed by these employees have also been converted and transferred into new licences under the category of ‘Skilled Workers’.
Additional changes to the sponsor policies will also be announced by 2022 and 2024 in order to further modernise the process. Recent news indicates that further policies will be tweaked and improved to form a brand-new system via three IT delivery packages that will be implemented by 2023 and 2024. For instance, UK citizens will be eligible to apply for a licence from the Home Office. However, foreign skilled workers applying from other countries will first need to request a ‘defined’ Certificate of Sponsorship from the Home Office. This does not mean that getting a Certificate of Sponsorship will ensure their employment with a particular employer.
When applying for a licence under the ‘Temporary Workers’ category, crucial guidance about the rules and procedures is best sourced from the UK Visas and Immigration website (gov.uk) because the eligibility criteria is not defined in statute laws. However, there are additional rules for organisations that accept applications under this category. Among other examples, the organisation should assess the eligibility for each route it wishes to take and make the related changes to its HR systems. Moreover, sponsors can also challenge any refusal of a licence in the case of an error discovered in the processing (Taylor 2018).
Emel Yilmaz, Founder
Suite 58, Grove Business Centre, 560-568 High Road, Tottenham, London N17 9TA
Tel: +44 02080 176398
E: emel@global-immigrationlaw.com
Global Immigration Law is a London-based firm that gives legal advice to organisations and individuals on employment-based immigration. Among their areas of expertise are visas, sponsor licenses, administrative review and immigration compliance training.
References
Clarkslegal.com. 2022. Hospitality shortage: Sponsorship Licence to recruit overseas Skilled Workers - Legal Updates. [online] Available at: <https://www.clarkslegal.com/Blog/Post/Hospitality_shortage_Sponsorship_Licence_to_recruit_overseas_Skilled_Workers> [Accessed 10 February 2022].
Howe, J., 2019. A legally constructed underclass of workers? The deportability and limited work rights of international students in Australia and the United Kingdom. Industrial Law Journal, 48(3), pp.416-446.
Richmond Chambers. 2022. The Skilled Worker Route - What’s Changing? - Richmond Chambers. [online] Available at: <https://immigrationbarrister.co.uk/the-skilled-worker-route-whats-changing/> [Accessed 10 February 2022].
Sumption, M. (2019). Is employer sponsorship a good way to manage labour migration? Implications for post-Brexit migration policies. National Institute Economic Review, 248, R28-R39.
Taylor, J., & Pagliari, C. (2018). Mining social media data: How are research sponsors and researchers addressing the ethical challenges?. Research Ethics, 14(2), 1-39.
Ruslan Ughrelidze, solicitor and managing director at Lawlex Solicitors, explains the features of UK courts that could make them uniquely suited to handling dispute resolution following Brexit.
The Commercial Court attracts a huge amount of business to the City of London. Many non-British companies use English law in their contracts and favour the London Commercial Court because of its expertise and legal tradition. They can be sure that they are going to get a fair hearing for business, that contracts will be enforced and rights upheld, and that the highly respected and independent judiciary will not be afraid of deciding cases against the government. Businesses coming to the United Kingdom for dispute resolution can be absolutely certain that they are going to get a fair trial, which obviously boosts business confidence.
Post-Brexit, many have expressed views about the role the UK will have in the world legal stage. This has stirred a great deal of debate, both sides of the argument having valid points – albeit speculative and unprecedented. It will be some time until braced onlookers feel the impact of the event. As ever, optimists only envisage prosperity and the remaining fraction predict gloomier prospects. Because of Brexit, some multinational corporations have also moved their European offices out of the UK, potentially taking their litigation with them.
The UK has a leading legal system aspired to by most of the world. Its strong legal traditions stretch back centuries, impossible to replicate without considerable effort and, most significantly, time. An influential aspect of the UK’s legal system – apart from the independence of the judiciary, the competence of the lawyers, and their training and qualifications – has been its stability, expertise and concept of precedent.
Businesses coming to the United Kingdom for dispute resolution can be absolutely certain that they are going to get a fair trial, which obviously boosts business confidence.
Further to the court system, another noteworthy feature of the UK legal sector is the London Court of International Arbitration (LCIA), which enjoys the reputation amongst its rival arbitration courts of being one of the best in the world for settling disputes. After Brexit, it is predicted that the LCIA’s popularity and attractiveness will rise. One of the reasons for this predicted increase in popularity – aside from the features attributed generally to the English court system – may be its ability to depart from the jurisdiction of the Court of Justice of the European Union. Unlike litigation in English courts, the LCIA offers much more freedom to the parties involved in the dispute, granting them the ability to adopt a procedural framework regulating the arbitral proceedings.
Similar to the commercial courts of the land, the LCIA is benefiting from features that are long-established and arguably unparalleled elsewhere in the world: autonomy of international arbitration; independent, competent and efficient judiciary with expertise in international arbitration; competence and routes to qualification for solicitors, counsels, arbitrators, judges and experts, and ethical and professional regulations that bind professional participants. Each of these can be named as some of the prime features enjoyed by the LCIA which enrich its reputation and fame on the world dispute resolution stage.
Other remarkable opportunities available during LCIA proceedings include Interim measures and the possibility to challenge the award on prescribed grounds. With such procedural safeguards in LCIA proceedings, participants can have full confidence in the court from its proceedings to its conclusion. The only remaining part after the determination of LCIA proceedings is an enforcement of the arbitral judgment or award, which is subject to mandatory laws of where the arbitral seat is located (LCIA). With these measures in place, it is easy to envisage the LCIA – and, by extension, the UK courts – rising to even greater prominence post-Brexit.
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Ruslan Ughrelidze, Managing Director
Level 30, The Leadenhall Building, 122 Leadenhall St, London, EC3V 4AB
Tel: +44 0203 432 7706
Fax: +44 0203 475 4149
Ruslan Ughrelidze is a practising solicitor in England and Wales and managing director of Lawlex Solicitors. His practice varies and includes civil litigation and human rights.
Lawlex Solicitors is a multidisciplinary practice based in the City of London specialising in litigation, dispute resolution, arbitration and some aspects of administrative law such as immigration and extradition law practice.
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A Competent Authority Agreement (CAA) between the UK and US was published on 28 July. The CAA confirms that despite the UK no longer being a member state of the EU, it will be treated as such for the purposes of applying paragraph 7(d) of Article 23 of the UK/US double taxation agreement (DTA).
The CAA apparently “reflects the shared understanding of the competent authorities that residents of either contracting state should be eligible to qualify as equivalent beneficiaries for purposes of applying the derivative benefits test.”
Before the CAA was agreed, concerns had been raised that, after Brexit, UK residents would no longer be “equivalent beneficiaries” under the “derivative benefits” test in the DTA. This position could adversely impact certain important cross-border structures. While the CAA is a welcome development, it is important to note that it only covers the UK/US DTA. We will have to await the conclusion of similar CAAs between the US and the Competent Authorities of the other 13 countries where this lacuna presents an issue although this CAA is a hopeful sign as to how the IRS will approach any others.
As many readers will know, the UK/US treaty contains a now-standard US-inspired Limitation on Benefits (LOB) article. The aim of this article is to limit the class of persons that can benefit from the treaty to those with sufficient nexus with either contracting state. In very simple terms, a company incorporated in England might be resident in the UK for tax purposes by virtue of being incorporated here, but that does not entitle it to automatically benefit from the UK/US DTA.
The derivatives benefits test essentially waters down the LOB by allowing, for example, an English company to avail of treaty benefits if the ultimate owners thereof would have been entitled to the same benefit, had the income in question flowed directly to them. Under the LOB, a resident company must meet an ownership test which requires that 95% of the ultimate beneficial owners must be EU residents. It also requires that a base erosion test be met, which requires that no more than 50% of gross income is paid or accrued to a person or persons who are not equivalent beneficiaries in the form of tax deductible payments.
For example, imagine that an English holding company had been incorporated by UK, Luxembourg, Spanish and Irish investors, with shares of 25% each, in order to make a US acquisition. Two years after the acquisition was concluded, the US subsidiary then wants to pay a dividend to its UK holding company. This would mean that the US company has to work out what rate of US withholding tax is due on the dividend. The UK/US DTA gives a rate of 5% or 0% if the UK company qualifies for the benefits of the DTA because it is owned by equivalent beneficiaries.
Under the terms of the UK/US DTA, as it stood prior to the CAA agreement but following Brexit, Luxembourg, Spanish and Irish investors were all potential equivalent beneficiaries, as they were residents of a country within the EU. However, if the UK investor was a UK company, it would not qualify as an equivalent beneficiary since it is no longer resident in an EU country. The effect of this would be that the UK holding company used to make the acquisition may not qualify for the UK/US DTA. As a result, the US withholding tax would fall due at 30% on the dividend. This is both a highly inequitable and undesirable consequence of the residence of a single shareholder falling outside the EU. It is notable that, in the scenario described, the three EU shareholders would also suffer the loss caused by the imposition of the US withholding tax of 30%. Such outcomes are obviously not in the interest of the EU, or the UK. It is therefore very welcome news that this initial CAA has been agreed upon.
As a result of the CAA, the UK investor in this scenario qualifies as an equivalent beneficiary. The net effect of the CAA is that, for these purposes, it is as if Brexit never happened, and the US subsidiary may be able to pay the dividend with a reduced rate of withholding tax.
In the scenario described above, there are many ifs and maybes. The reason for such caveats is that the question of whether a person is an equivalent beneficiary depends on more than simply being resident in the EU. In a real-world scenario, there would be several important additional considerations and requirements to be taken into account. However, the above scenario is simplified in order to illustrate the impact of the CAA in terms of the issue of residency. Of course, in a real-world scenario, the dividend may qualify for treaty relief in another way. However, to cover all of the possibilities would require one if not more newsletters all of their own.
The scenario addressed by the CAA demonstrates that there are still many loose ends to be tied up in the wake of Brexit. Those advising on corporate structures and acquisitions with an international dimension need to be wary of such risk.
About the author: Miles Dean is the Head of International Tax at Andersen in the United Kingdom.
Jon Belcher, specialist data protection lawyer at Excello Law, examines the government’s aim and its recent consultation and argues that, while the current data protection law is far from perfect, reducing compliance obligations will weaken individuals’ data rights.
Brussels has warned that it will sever the adequacy decision granted to the UK if the UK government’s proposed data protection reforms pose a threat to EU citizens’ privacy. The EU’s robust response came in the wake of the announcement of plans to overhaul the UK’s data protection regime.
Last August, the then Secretary of State for Digital, Culture, Media and Sport (DCMS) Oliver Dowden said, "Now that we have left the EU I'm determined to seize the opportunity by developing a world-leading data policy." Mr Dowden spoke of “reforming our own data laws so that they're based on common sense, not box-ticking”. The details of the government’s proposals have now been set out in a substantial consultation document.
The government aims to create a series of “data adequacy partnerships” with states around the world to facilitate trade by minimising data protection compliance barriers. The government hopes to reach such agreements with nations including the United States, Australia, South Korea, Singapore, Dubai and Colombia. The DCMS promises that high data protection standards will be maintained while making it easier for businesses to transfer personal data outside the UK.
Reforms to the UK’s data protection regime have long been talked up by pro-Brexit politicians. The GDPR is often seen as overly complex, burdensome and bureaucratic. Easing some of its requirements would be seen as a much-needed Brexit win for these politicians.
At the end of the Brexit transition period, the European Commission granted an “adequacy decision” to the UK, as regards its data protection regime. This allows the unrestricted transfer of personal data from the EU to the UK. This is crucial for many UK businesses. Any significant move away from existing GDPR standards could come with a significant economic cost.
The EU remains the UK’s most important trading partner. The 2019 figures are the most relevant since that was the last normal trading year before the disruption caused by the coronavirus pandemic. In that year, exports to the EU of £72 billion accounted for 43% of the UK’s total exports. Services accounted for 43% of this figure. By comparison, the UK’s next largest export market was the US, which accounted for 19% of exports. Clearly, it would be unwise to risk disrupting the free flow of data with the EU in return for a slightly simplified data protection regime.
There is no guarantee the proposed measures will reduce compliance costs in practice. The introduction of GDPR in 2018 involved a major adjustment for organisations in the UK in terms of their data protection policies and procedures. That has now been done. Most businesses now have satisfactory systems in place and the requirements are widely understood.
Changing the goalposts once again, just a few years later, would cause a new wave of disruption. Many UK businesses are still adjusting to the new paperwork required for EU trade since earlier this year. It may be best to simply leave well enough alone.
While the government is no doubt right to say that cookie banners are frustrating and the GDPR is not perfect, any drive to reduce compliance obligations will inevitably weaken individuals’ data rights and protections. Such moves could meet with a backlash from privacy campaigners. Public anxiety about data protection has been heightened by high profile ransomware attacks.
A key motivation for changing the UK’s data protection regime given the government’s document which analyses the impact of the proposed changes. It states that “Data has become a driving force of the modern economy, at the forefront of technological and scientific progress, driving scientific discovery and new goods and services. The UK direct data market - consisting of value added from the generation, storage, processing and analysis of digitised data - has been estimated to be worth over £15 billion annually.” The paper argues that reforms should aim to achieve “a pro-growth and trusted regulatory regime for data protection.” Post-Brexit, the government wants the UK to benefit from this global growth industry.
Some of the suggested measures set out in the consultation document include removing the requirements to appoint a dedicated Data Protection Officer and undertake data protection impact assessments, as well as changing the data breach reporting requirement to only apply when there is a “material risk” to individuals, instead of a “risk”, as is now the case. Other changes might be popular with businesses, but unpopular with the public, such as the proposal to allow charges for data subject access requests.
Overall, the consultation paper promises a “regulatory regime will be clearer and more suited to an agile, technology-driven economy. Regulatory requirements will be focused on the outcomes that must be achieved, rather than prescribing how they are achieved.” While many businesses would prefer a lighter touch, less prescriptive regime, the EU will likely regard such changes as a significant watering down of its high standards, which could jeopardise the UK’s adequacy decision.
Multinational businesses are likely to continue to apply the EU’s data protection rules. Indeed, the rest of the world is increasingly looking at the GDPR as an international standard. For example, in recent weeks China has created a new data protection regime that echoes aspects of the GDPR. Similar trends are also happening in other jurisdictions.
Any changes to the UK’s data protection regimes will need to be measured and incremental. A major shift away from GDPR standards could prove costly. The government will need to tread carefully when balancing risk and opportunity.
Should our UK law on the Right to be Forgotten and digital obscurity be better aligned with those of Europe? It seems the European Court of Human Rights (which the UK remains part of post-Brexit) agrees that it should.
Europe is setting the example for people's right to digital obscurity by bringing GDPR regulations into force. Successful cases of people invoking their right to be forgotten (RTBF) across Europe and having unwanted information about them removed from online sources is much more prevalent than in the UK. But what is the right to be forgotten?
The RTBF is the legal process of requesting the erasure of personal data from an organisation’s database. More specifically, this ruling – within the European Union only – makes Google responsible for removing “irrelevant” or “outdated” information from search results. Along with other search engines, Google must also consider removing links to data that is inaccurate, inadequate, irrelevant, or excessive when filing a request from an individual about their own search results.
With our personal reputations and career prospects reliant on the results that appear when our names are entered via search engines, it is no wonder many people look to evoke their RTBF.
Europe is setting the example for people's right to digital obscurity by bringing GDPR regulations into force.
So, what are the legalities? The UK General Data Protection Regulation (GDPR), which was retained from the EU regulation under article 17, cemented this into law and now provides individuals with the right to request erasure of their personal data online. All GDPR rights continue to exist in the UK post-Brexit.
GDPR guarantees the right for people to have their personal data erased. Additional terms also apply:
When an individual contacts an organisation regarding the deletion of their data, the organisation must erase the personal data without undue delay. If the organisation has made the data public, then they also must inform other data controllers who process the data that the individual has made a request to be forgotten, and they must also erase the data, including links and copies.
Under GDPR laws, organisations that fail to comply with such requests face potentially hefty consequences – often to the tune of £20 million in fines or 4% of global annual turnover, whichever is higher.
Organisations often argue against RTBF because they feel the claims are against the data storage and retainment necessary for compliance with a legal obligation or the defence of legal claims. However, where there is no justification, the organisation must comply with the individual’s legal rights. There is no absolute right to be forgotten; it is determined on an individual basis.
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In June 2021, the European Court of Human Rights (ECtHR) – the court of the Council of Europe, of which the UK remains part – rejected a freedom of speech complaint brought by Belgian newspaper Le Soir publisher Patrick Hurbain concerning an RTBF judgment in his home country. The ruling ordered him to anonymise the name of a driver responsible for a deadly car accident in 1994 in Le Soir’s electronic archives. The original report of the accident, which caused the death of two people and injured three others, had mentioned the driver’s full name, which has now since been replaced with the letter X.
The Belgian court recognised the right to be forgotten as “integral” to the claimant’s right to privacy and family life. In this case, the claimant was deemed to have served their sentence and been rehabilitated. Leaving the historical information online would create a lasting criminal record and cause indefinite and severe harm to the driver’s reputation.
However, what makes this interesting is that the European Court judgment has now appeared to extend the “right to be forgotten” from search engines to news websites. Not only can RTBF requests ask for information to be removed from search engine results, but redacted and omitted from online news publications as well.
ECtHR decisions can take time to become part of domestic law, and because UK law is now somewhat removed from Belgian law, it is likely to be a long time before we see the same swift decisions in the UK as we have in the EU. The right to be forgotten is a hot topic. It is not beyond the realms of possibility that a UK news publisher could receive a request to amend a historical article by removing their name or identifying data that would no doubt have to be given real consideration.
This is where I argue that it is time for the UK to follow suit. The Belgian case was a clear example of where anonymisation of a person’s name for a spent crime no longer of public interest was correctly ‘forgotten’.
There is no absolute right to be forgotten; it is determined on an individual basis.
If information were to remain in the public domain, it could have severe consequences for someone trying to rebuild their reputation and life. The discussion around the right to be forgotten must continue and swift action taken to implement the processes of the EU to help protect the privacy and respect of UK citizens.
While China, India, Saudi Arabia and the US remain exceptional cases, 15 out of 19 (almost 80%) of G20 countries now have full-fledged statutory data protection laws. By default, virtually all of these laws empower individuals to challenge the continued dissemination of personal data not only when such data may be inaccurate but also on broader legitimacy grounds. Within the EU, Google and other search engines have made an incredible difference by providing the ability to request the removal of personal data via RTBF, which many have now done with great success.
These are all steps in the right direction toward helping individuals invoke their right to be forgotten and prevent damage to their reputation with personal data being removed or anonymised online. Now on the recent case of the ECtHR’s extended ruling on the Belgium RTBF request, I would like the UK legal system to follow suit and do more to safeguard the reputation of people online.
UK courts typically consider judgements from the European Court of Human Rights. It will now be a question of whether UK courts feel that, considering UK law, they need to follow similar judgements, or whether they will lean more towards upholding the rights of freedom of expression from journalists and publications.
Should they not follow suit, we may begin to see people making direct appeals to the European Court of Human Rights themselves if they felt that the UK courts had not ruled appropriately in their case for digital obscurity.
Simon Wadsworth, Founder
Igniyte
Address: 1 Aire Street, Leeds, LS1 4PR
Telephone: +44 (0)203 542 8689
Email: simon@igniyte.com
Website: igniyte.co.uk
Simon Wadsworth is the founder of Igniyte and a global reputation management expert. He has advised chief executives at Mercedes, ITV, Bibby, and Quorn.
Igniyte is a leading authority in online reputation management, working with businesses, brands, high net worth individuals and business owners across the UK, Europe, Africa, the UAE, the US and Canada.
The past year has been full of trials and tribulations for work practices across every industry in the UK. The legal profession is no exception. When COVID-19 struck, law firms were forced to close their offices and switch to a remote working model. As a result, both in-house legal teams and external law firms needed to explore virtual ways of delivering their services.
Although remote work was not a totally new phenomenon, the urgency with which the transition took hold, alongside the fact that many legal businesses still relied upon traditional working practices and legacy technologies, left many individuals in the profession feeling underprepared and unable to work effectively.
To make matters worse, against this backdrop of chaos, the UK’s exit from the European Union still needed to go ahead. The ratification of Brexit has had a significant impact on workload for all legal professionals, regardless of specialism or job role. As law firms and corporate law departments get to grips with the myriad of new regulations, and subsequent client requests and activities, the switch to remote working has presented yet another unwelcome hurdle.
With legal workloads at an all-time-high it has never been more important for law firms to ensure that their employees are equipped with the tools to remain productive and collaborative, regardless of where they are working. Whilst set to be challenging, this period of transition could also be one of opportunity for legal professionals, enabling them to maximise on new business opportunities and become an essential asset to their clients.
As the UK finds its feet as a nation officially outside the European Union, professionals in the legal sector have found themselves suddenly juggling a spike in demand for their services. While growth is a priority for all businesses, it must be manageable in order to reap the rewards. Unfortunately, for many legal professionals operating in today’s climate of crisis, this is not the case.
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In fact, recent research revealed that despite 58% of in-house legal teams seeing their workload increase as a result of the pandemic, only 6% saw their budget rise to support the extra activity. It is no surprise that 29% of those surveyed said they are having to do more with less. This can have a negative impact across the whole sector and those working within it. For example, research from legal software specialist Access Legal discovered that time constraints were the top challenge for all law firms, regardless of size, with 48% struggling to set time aside for career development processes such as essential learning and training.
To add to this, maintaining a healthy work-life balance while tackling high volumes of work in the midst of a pandemic is not easy, especially within the legal sector. In fact, according to recent reports, 70% of lawyers believe they work in the most stressful profession, with 81% of respondents naming workload as the leading cause.
Whilst challenges related to remote work rage on, in the lead-up to Brexit, many firms - particularly those that carry out cross-border work - have faced pressure to ensure that they themselves are compliant. From understanding where data is stored and how it is transferred to reviewing and updating privacy notices, consents and relevant policies and procedures, firms will have needed to take necessary steps to ensure they comply with both the EU GDPR and the UK Data Protection legislation. Moving forward, clients, suppliers and other third parties will need to be informed around the transfer of data, and, more importantly, staff will need to undergo relevant training.
Needless to say, legal professionals are currently faced with a never-ending to-do list, from client requests to internal processes. In order to support their staff and enable them to transform this pressure into opportunity, legal businesses need to streamline operations.
Moving forward, clients, suppliers and other third parties will need to be informed around the transfer of data, and, more importantly, staff will need to undergo relevant training.
Modern technologies - such as legal speech recognition software – could provide an answer. These solutions empower barristers, solicitors, paralegals, clerks, and other legal professionals to complete documentation simply by using their voice. They can help legal teams to navigate the challenges of Brexit whilst still delivering in terms of client needs and maintaining productivity levels, regardless of where employees are based.
Recent research by Nuance revealed that legal professionals spend an average of three hours a day typing out case notes, briefs, contracts, and correspondence. By leveraging speech technologies, most of that time could be diverted towards other, more valuable activities - such as billable work and client service. These technologies can convert spoken words into editable text up to three times faster than they could be typed, resulting in a significant reduction when it comes to document turnaround time. They are able to recognise specialised legal vocabulary and acronyms and even enable automatic formatting of legal citations. The best on the market are powered by deep learning technology which achieves the highest recognition, even for users with accents or those working in open office environments.
Cloud-based technology ensures that legal professionals have access to all these features, regardless of where they are based. This is something that proved particularly useful over the last year. In fact, the research found that 80% of legal practitioners who were already implementing speech-to-text solutions felt properly equipped to work from home when the pandemic struck, as opposed to just 53% of those not implementing the technologies.
One example of a legal professional already benefitting from this technology is Jonathan Silverman, founder of Silverman Advisory LLP. He deployed speech recognition in his firm for the first time in 1995 and has been leveraging the technology ever since. In addition to speedy and accurate document creation, Jonathan’s firm is able to meet client needs swiftly, and personally benefit from greater job satisfaction through increased control over document production.
For legal professionals – whether in-house or external - discovering the benefits of digital transformation in this new post-Brexit, remote world, legal speech recognition technology could be the secret for meeting client needs, growing practices, taking on new clients and increasing overall profitability.
Ed McGuiggan, Vice President of Global eCommerce
Nuance Communications UK Limited
Address: 33 Soho Square, London W1D 3QU, United Kingdom
Tel: +44 (0) 1628 491600
Last year, Chanel's worldwide brand was valued at $13.7 billion, an increase of more than $2 billion on the previous year and three times what it was worth in 2017, according to Statista. It is therefore no surprise that the company is extremely vigilant in pursuing infringement of its trademark, which serves to undermine its brand. Indeed, Chanel is notorious for its efforts in defending it against misuse and infringement.
Alongside various ongoing legal battles with retailers who sell allegedly counterfeit Chanel goods, the company has also begun a legal action in London against an online retailer (Kensulate Corporation Ltd, which owns the Crepslocker online store) that sells authentic Chanel goods.
Chanel v Crepslocker: the arguments
The France-based fashion house accuses Crepslocker of infringing the Chanel trademark by tarnishing its positioning as a luxury fashion brand. Its principal arguments against Crepslocker fall under four main headings:
In its defence, Crepslocker invokes the exhaustion of Chanel’s rights to the sold products. Under the trademark exhaustion rule, after the first sale of a trademarked product by the trademark holder, or with their consent, the holder can no longer control the subsequent sale(s) of the product. The exception is that the trademark owner can oppose subsequent sales for legitimate reasons, especially when the condition of the products has been materially changed or impaired.
Crepslocker further argues that the distinction which Chanel makes between the goods that it sells online and those it does not is artificial. According to Crepslocker, mixing Chanel products with sportswear does not tarnish its reputation, and Chanel has separately collaborated with sports apparel manufacturers for its products.
In prior cases where conflict existed between luxury brands and online resellers, British courts were bound by guidance from the Court of Justice of the European Union (‘CJEU’) – until Brexit took effect last year. Now that the UK is no longer part of the EU, the dispute will be subject to English law. Post-Brexit, as of January 2021, the UK’s Supreme Court is no longer bound by decisions of the CJEU. However, British courts are free to take such decisions into account in their own rulings.
In terms of trademark rights exhaustion, the Trademarks Act 1994 is fully harmonised with EU legislation: Directive (EU) 2015/2436. Both approximate to the laws of individual Member States relating to trademarks, stipulating the principle of trademark exhaustion and providing the same exception.
As of January 2021, the UK’s Supreme Court is no longer bound by decisions of the CJEU.
What the CJEU says
There have been several notable CJEU cases which establish a fairly consistent precedent: they indicate that the EU’s main judicial body is protective of trademark owners. Of these, three stand out.
From a competition law perspective, in the leading Case C 230/16 Coty Germany GmbH v Parfümerie Akzente GmbH, the CJEU ruled that luxury brand owners are entitled to implement selective distribution systems, i.e. sale systems where they control the distribution chain, in order to preserve the luxury image of their respective goods. This entitlement is on condition that the selection of resellers is undertaken based on “objective criteria of a qualitative nature that are laid down uniformly for all potential resellers and applied in a non-discriminatory fashion and that the criteria laid down do not go beyond what is necessary”. The ruling allowed brand owners to exclude the internet sale of their goods through contractual clauses.
In Case C 59/08 Copad SA v Christian Dior couture SA, the CJEU held that when a licensee of the trademark owner sells goods in a discount store, in spite of the contractual provisions of the licence which do not allow the licensee to do this because of the trademark’s prestige, the trademark proprietor can invoke the rights conferred by that trademark against the licensee. This can happen provided it has been established that that contravention damages the allure and prestigious image which confers an aura of luxury on those goods.
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When it comes to packaging, the CJEU held, in Case C 324/09 L’Oréal versus eBay, that selling a product after removing its original packaging may be opposed by the trademark holder “where the consequence of that removal is that essential information, such as information relating to the identity of the manufacturer or the person responsible for marketing the cosmetic product, is missing. Where the removal of the packaging has not resulted in the absence of that information, the trademark proprietor may nevertheless oppose the resale of an unboxed perfume or cosmetic product bearing his trademark, if he establishes that the removal of the packaging has damaged the image of the product and, hence, the reputation of the trademark.”
These decisions show that controlling the sales channels and having respect for the integrity of the original packaging are acceptable exceptions to the trademark exhaustion rule. Although they are no longer obliged to follow CJEU rulings, it is unlikely that the higher courts in the UK will depart from established trademark principles without well-grounded reasons.
Crepslocker used to sell both new and second-hand Chanel products. In the case of new goods, it may be possible that the UK courts will deem the situation similar to those already mentioned in the CJEU cases. However, an element of novelty rests in the used products which Crepslocker kept in consignment from its customers. Here, the courts would probably consider balancing not only Chanel’s rights against those of Creplocker, but also consider the (natural persons) owner’s rights of the used products to have a platform to sell these goods.
it is unlikely that the higher courts in the UK will depart from established trademark principles without well-grounded reasons.
Chilling effect
Should the dispute end in a settlement or a win for Chanel, this may well have a chilling effect on online resellers of other luxury brands in the UK and elsewhere in Europe.
It can be argued that maintaining the prestige and value of luxury brands, by setting and keeping sales standards and specific outlets, protects both the brands and the consumers of luxury goods, because the large investment they make in purchasing them is not easily diminished. However, part of Crepslocker’s business responds to a genuine consumer need to own luxury products, and the corresponding demand for them. Careful consideration should be given to determining whether the second-hand luxury goods market is different from the new luxury goods market and if the exception to the trademark exhaustion principle still applies or not.
Flavia Stefura, Senior Associate
MPR Partners
Address: 6A Barbu Delavrancea Street, Building C, Ground Floor, 1st District, 011355 Bucharest, Romania
Tel: (40-21) 310 17 17
Fax: (40-21) 310 17 18
E-mail: office@mprpartners.com
Flavia Stefura is a part of the advisory department at MPR Law, being primarily involved in IP, data privacy, competition, consumer protection and M&A matters. Bringing a wealth of experience from her work on behalf of reputed international law firms present on the Romanian market, Flavia is also versed in corporate and commercial, employment, regulatory as well as administrative matters. She has advised high profile clients active in various industry sectors including retail, FMCG, banking and finance.
From 1 January 2021, the rules of jurisdiction set out in the Brussels I Regulation ceased to be applicable. What were the most imposing changes that needed to be prepared for?
I believe this will mean furthering collaboration with specialists in other jurisdictions as we will have lost an acquired certainty for an inevitable uncertainty. The UK has become a third state for the purposes of Brussels I Regulation and as such, we cannot assume the same fluidity and recognition regarding enforcement.
Enforcement out of the jurisdiction will depend on a variety of factors which will need to be considered on a case-by-case basis. The situation will hopefully become clearer through legislation and development as issues arise.
A short-term effect is that practitioners involved in cross-border disputes with a UK/EU element will need to rely on the relevant provisions, treaties and domestic legislation and on the timing of the legal proceedings in question. It will be imperative to add clear jurisdictional clauses, especially in this initial phase and until clear precedents are set. Finally, we need to hope that the Ayala court understanding will be echoed by the EU courts. Early signs to that effect are mixed.
What needs to be shown in order to obtain permission to serve out of the jurisdiction?
The 10,000 feet rule is that documents must be served within the jurisdiction, i.e. England and Wales. There is no absolute right to serve a claim form out of the jurisdiction without the permission of the Court. Again, a clear service clause in an agreement could be of great assistance to avoid costly debates and cost of service.
The ability to serve a claim outside England is based on the fact that the court has jurisdiction to determine the dispute between the parties. Consideration needs to be given to the possible jurisdictional challenges, a good practice in any event. It will not sit well with the client to be turned down at this stage of the proceedings.
In determining the application, the court will need to be satisfied that three requirements have been met: whether there is a serious issue to be tried, whether there is a good arguable case and whether the court is the appropriate forum.
What role does the Hague Convention on Choice of Court Agreements 2005 play here?
A great role indeed! The position of the UK is that the application of the Convention vis-a-vis the UK will continue without interruption. It should be noted that the EU Commission has recently taken a different approach from the UK as to whether the Convention applies to exclusive jurisdiction clauses in favour of the courts of England and Wales that were entered into prior to 31 December 2020.
The Private International Law (Implementation of Agreements) Act 2020 received royal assent on 14 December 2020 and achieves the domestic implementation of the Hague Conventions. Therefore, service using this mechanism is available as it was before Brexit took place, and is of greater importance now as other avenues may no longer be available.
Post-Brexit, enforcing English judgments throughout the EU may be marginally more difficult than it currently is under Brussels Recast. What difficulties may be presented here?
From 1 January 2021 onwards, parties with an English judgment wishing to enforce within the EU will no longer be able to rely on direct recognition and enforcement, which was previously afforded to them under the Recast Brussels Regulation. Therefore, added difficulties arise in determining under which mechanism enforcement will be recognised. Options to be considered include the Hague Convention, bilateral treaties and local laws of the specific EU Member State.
In a nutshell: we will need to have local specialist knowledge in each jurisdiction in which we are attempting enforcement. This may affect times and costs for the clients and will likely also add an element of uncertainty increasing perceived resolution of the matter. Last month we had a valid order to execute in France and the French court requested additional documents to be translated, at great cost to the client, to rule that they needed more time to consider. In the meantime, the French entity we attempted to enforce upon entered administration, putting us in a queue of creditors as the French Court had not yet validated the UK order. Luckily with some persuasion, reason prevailed for the client, but it is certainly a sign of things to come.
In a nutshell: we will need to have local specialist knowledge in each jurisdiction in which we are attempting enforcement.
What factors may ameliorate these difficulties?
Being strategic from the start of the matter and ideally from the contractual phase. Having a good team of Strategic Alliance Partners in the local jurisdiction will certainly be advantageous, saving costs and time for the client. We have focused the development of ASV Law to that effect and early signs that it was the accurate move are already showing. A deeper understanding of the client’s real goal will help in defining where to start proceedings, as sometimes it may be worth bypassing the UK Courts altogether to secure execution if we identify a risk factor, such as administration or weak economic position of the defendant. Winning a case and not being able to execute the order is great for the lawyers (a win is a win) but often pointless to the clients!
Simon Vumbaca
ASV Law
Address: 1 Knightsbridge Green, London, SW1X 7QA
Tel: (+44) 020 7993 5450
Email: info@asvlaw.com
Website: www.asvlaw.com
ASV Law was established by Simon Vumbaca in 2011 and is an international law firm based in Knightsbridge, London. It delivers corporate, commercial and litigation advice to global clients, bringing parties together to facilitate settlements and mediation.
Simon Vumbaca is an award-winning lawyer with over 25 years of international experience and a reputation for delivering substantial corporate and commercial sector success. Qualified in multiple jurisdictions, Simon offers international clients strategy-led complex cross-border litigation and arbitration advice with great success.
