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On top of offering outstanding services in the pensions realm, our next expert witness is often called to assist in pension division and sharing matters. Here to talk Lawyer monthly through his role in this field, discussing the variables in divorce cases, and touching on the legislation that has changed the landscape of pensions law through the years, is Mark Penston, a Chartered Financial Planner at BlueSky Chartered Financial Planners, in the UK.
In your role as an expert witness, what are the primary matters you are instructed to advise on in divorce cases?
Generally we are asked to assist with calculating how existing pension funds should be shared. This might just be a discussion that can help give direction on how to approach a case, or more often, an instruction to produce a pension sharing report to show how the pensions should be divided to produce equal incomes in retirement. Additional information may also be requested, such as how to offset a pension share in lieu of cash or property equity.
What are the particular complexities that arise therein?
Pensions can often be complex, with even apparently straightforward money purchase plans having complexities that are not immediately apparent. Often Defined Benefit pension valuations do not represent the true value of the pension benefits, which means that sharing pensions based on the capital value alone can have some dramatic unintended consequences. Approach with caution!
In divorce cases, to what extent to do you get to engage in the full capacity of your expertise, in financial planning for example?
With larger cases (CE’s in excess of £500k) where we have a good understanding of the respective clients’ financial circumstances, we are able to create solutions to maximise outcomes when sharing assets. It draws on our technical and financial planning skills and also our ability to put solutions in plain English that all parties can understand.
How do you efficiently and fairly advise on the division of pensions and other assets in divorce cases?
Our preference is to be instructed as a single joint expert and work with the instructing parties to produce clear and relevant instructions (conversely, we dislike ‘standard’ letters of instruction asking multiple questions to ‘cover all bases’ that are likely to result in pension sharing reports with too many irrelevant results!). It’s worth spending time getting the instructions relevant and focused.
Once instructed, we have an efficient process of collating and checking the required data and good turnaround times in getting reports produced.
What would you say has been the milestone legislative change that has impacted your work in this legal segment over the past 20 years?
The introduction of pension sharing legislation nearly 17 years ago triggered a number of initial enquiries. We became involved in this business because we had a depth of pensions experience and expertise and it fitted well with our client profile. Good work gets recognized and we’ve therefore increased our involvement in this specialist field as a consequence.
The most recent changes in pension legislation have introduced flexibilities that allow more creativity in how pensions can now be shared.
If you could see any UK pension laws changed, especially following Brexit, where would you start?
Pensions legislation keeps changing and in part I think it undermines people’s confidence in them. Pensions should be long term / stable products that aren’t constantly being ‘tweaked’.
Having said that, there are some anomalies in the current legislation. For example, why is there a cap on what you can put into a pension AND a cap on the maximum fund size you can have without punitive tax consequences? This can restrict the ability for someone to rebuild a pension when they have lost a large chunk of it through pension sharing.
I think Brexit is more likely to change the economy dynamics rather than pension laws. Pensions flexibility and portability into Europe never happened, so Brexit is unlikely to change much there!
Overall, what would you say makes you the go to expert witness for pensions law in the UK?
Being financial planners, we can offer creative solutions with both the division of pensions and other finances.
Our success as a business with our financial planning clients has come from our ability to convey complex solutions to clients in an easily understood format. I believe our reports are much easier to understand than many actuarial reports, perhaps evidenced by the number of actuarial reports we are asked to interpret and make relevant to the client!
We have worked hard over many years to hone our processes to enable us to offer an accurate and timely service, despite the many challenges that pension trustees often present us with!
‘As an ever-more technology dependent society, we should strive to make processes for obtaining IP smoother and faster and find more ways to support (suitably deserving, of course) fledgling companies in protecting their IP’ – this is the opinion of Ilya Kazi, one of the Senior Partners at Mathys & Squire LLP in the UK. Here Ilya provides an outlook on his thought leadership in the UK-European IP landscape, and touches on some of the changes he would like to see facilitate his clients.
What are the most common types of IP matters you work around in the UK?
My personal practice now mainly consists of conducting European Patent Office (EPO) Oppositions and Appeals and giving related strategic advice to help position clients with respect to their competitors’ IP, or to prepare for an exit, although last year a major litigation took up much of my time. I also supervise some large client patent prosecution portfolios of hundreds of patents, although my team mainly does the day to day hard work and I mainly finesse the overall direction or get stuck into difficult cases.
What particular challenges are encountered therein and how do you help resolve them alongside your clients, both domestic and international?
In the EPO and UKIPO, we are generally dealing with a reasonably competent tribunal, I have a good understanding with my clients as to what a realistic outcome might be (even though we may aim more ambitiously) and we tend to achieve or exceed expectations. However, occasionally we face a struggle, and consequent expense, caused by the failure of a tribunal (often examiners in certain overseas patent offices) to appreciate technology or a nuance of a case and this can be particularly frustrating for smaller clients for whom getting appropriate protection is both of significant importance and who have limited resources. The only resolution is merely to be very open with clients about what to expect, and to assist in determining, commercially, how far it is worth fighting or what alternatives to what might be academically the “right” answer we can live with.
How do you feel the UK and international IP landscape has evolved to become what it is today in terms of legislation and goals still to come? What’s next on the IP agenda?
I think the greater harmonisation and streamlining over the couple of decades I have seen has all generally been a good thing. In terms of Brexit, I recently hosted a discussion with senior representatives of about 15 major household names brand owners, the UKIPO and representatives of INTA who between them had over a trillion of market cap, a million employees and hundreds of thousands of marks and patents between them, and nobody could see anything positive in Brexit. A simple short term goal that came out of that discussion is a desire that there will be at least an inexpensive simple transition from existing community IP rights to national rights.
You have worked on patents and IP in several sectors; which do you find to cause the most complications? Why do you think this is?
Two areas I work in a lot jump out; the first is software. Here one is often working at the borderline of what is patentable and the border shifts from time to time, and the practices of individual offices diverge from each other, and moreover the approach taken by individual examiners or even Boards of Appeal within a given office also varies. This makes it hard to give clients certainty about expected outcomes.
The second is medical devices. Often there is a great innovation but the devices are not drastically different from old devices used in a different way. The US allows methods to be protected but Europe does not.
The plus side in both is it is often very satisfying to get clients protection which was by no means guaranteed by adopting a little creativity.
Are there further developments you would like to see facilitate your work in IP and as a thought leader, how are you working towards developing said change?
I would love to see IP processes speed up and focus so that, at least for clients for whom timing is important, we can get to what is an objectively reasonable conclusion in a shorter timescale.
As to what I have done, I have given direct feedback in informal meetings with offices such as the UKIPO concerns and suggestions and to their great credit they are receptive to them but I confess I have not done much to tackle the wider issue.
I worry that as the economy is squeezed as a result of Brexit, this is not going to be top of the agenda.
Customs law, import and export formalities; if you import or export goods to or from the European Union, you will be forced to deal with them. Depending on origin, classification and value, import, anti-dumping and anti-subsidy duties, and import VAT will be among the charges payable upon declaration. If Customs & Excise take the view that a declaration was incorrect, additional duties and taxes may be retrospectively levied, often confronting businesses or even entire industry sectors with very substantial costs, which are usually neither budgeted nor recoverable. If confronted by reassessments from Customs & Excise, businesses will need specialized help, yet lawyers specialized in fending off customs claims are scarce.
Rotterdam based law firm Kneppelhout & Korthals is one of the very few to deal with all aspects of customs law, including issues where customs authorities have been attributed enforcement tasks such as in the areas of food and product safety, seizure of counterfeit products, export controls, sanctions and the environment. Jikke Biermasz and Marijn van Tuijl, Partners of Kneppelhout & Korthals here share their views on the past, the present and the future of customs law.
What are the current developments?
The outlook of the international trade landscape is set to change profoundly in the next few years. CETA negotiations have reached, and TTIP negotiations may reach, their conclusion shortly. The presently unknown consequences of Brexit are also a cause for concern. Against this background the new Union Customs Code just entered into force. Although there are no fundamental changes, a number of issues will require businesses to carefully review certain consequences, for example with regard to the abandoned ‘first sale for export’ principle, the new provisions on Binding Tariff Information applications, and on AEO licenses. Furthermore IT will play an ever more important role in communications with Customs & Excise. Modernization of the supply chain and communication with customs bring along new challenges and complex legal issues too.
Can you mention some highlights of the past year?
In the past year we (again) saw much activity concerning anti-dumping and anti-subsidy measures on solar modules and cells of Chinese origin. While the regulations on this topic were already adopted in 2013, in recent months we have seen a significant number of substantial customs claims concerning alleged circumvention via Taiwan and Malaysia and evasion of the MIP Undertaking by Chinese exporters. The solar panel file is far from closed. It appears that the European Commission, OLAF and the national authorities should be able to detect shifts in the flows of goods from China to other countries, but in reality these issues are raised by Customs & Excise several months or even years after the events took place, sometimes with hefty financial impact for customs agents and other logistic service providers who did not adequately protect their business against the risks connected to imports of solar modules.
Importers and their customs agents also have many questions on the extension of the duties on Chinese panels via Taiwan and Malaysia since 2016. Panels consigned from these countries have been registered since the end of May 2015. Some companies are exempt, but there are questions about the requirements that have to be met. The scale of the solar panel case is unprecedented and as most import declarations are made in the Netherlands, we are in the centre of the storm.
On fasteners: as a result of the WTO-ruling of 26th February 2016, the Commission repealed the anti-dumping duty imposed on certain iron or steel fasteners from China since 2009 and extended to imports of fasteners consigned from Malaysia. Apparently, the Commission is of the opinion that the infringements of the WTO Antidumping Agreement is found by the Dispute Settlement Body are of such severe nature, that it is not possible to nail shut the measure again, like the Commission still did in 2012 when China also successfully filed a complaint. Therefore, the Commission decided to withdraw the regulation in full, however without retroactive effect. We anticipate that many businesses will want to take steps to claim reimbursement of the duties they paid. At some point the European Court of Justice will be asked preliminary questions about the validity of the fasteners measures in view of the rules laid down in the Basic regulations anti-dumping duties. If the ECJ would rule that the measures have been invalid from the beginning that means there is retrospective effect. A word of caution though: claimants must prevent expiry of the statutory period of limitation by filing formal request for repayment or reimbursement immediately; this cannot wait.
We are furthermore seeing an ever-increasing awareness of export controls and sanctions legislation. US companies have been mostly very professional in dealing with these issues for years. It now seems that Europe is finally catching up, which is for the better, as the legal consequences of export violation are severe; it is a crime, penalties can be levied, arrests are possible, and there are personal consequences for people that intentionally violate rules (get fired, imprisonment etc.). Apart from that there is of course a huge risk of commercial and reputational damage. Companies can lose contracts or be publicly named and shamed.
How do you add value to your clients’ businesses?
We believe that a successful approach to customs matters requires active knowledge of all other aspects concerning the international trade of goods. Our approach is unique in the Netherlands. Our customs practice is embedded in a broad-based trade, regulatory, transport and insurance practice. Our clients will be assured of top notch legal assistance, be it in a customs case, when food safety authorities seize goods, or when any mishaps occur in the logistics chain.
Do you have a mantra or motto you live by when it comes to helping your clients?
Lawyers still have certain legal privileges, but essentially they are service providers. After 35 years of providing legal services, creating added value for our clients is still our key driver. As a full service firm Kneppelhout & Korthals is committed to take client service to a new level. An independent agency monitors our customer satisfaction level on a continuous basis. Currently, we score an average of 8.8 out of 10.
What top 3 qualities make a thought leader?
What’s most important to you and the firm?
Every law firm’s existence entirely depends on being and staying of relevance and of value to its clients. As a full service firm we distinguish ourselves from other firms by offering services and specialisms which bigger firms do not, or no longer, offer.
The maritime industry, including international shipping and trade, is regulated by a complex network of international treaties, regulations and rules, not to mention different national laws and procedure. As well as having to keep abreast of maritime treaties and laws, maritime lawyers often need to have a good grasp of other areas such as employment, trade and commercial law, private international law and the international law of the sea.
To this end Lawyer Monthly here speaks with Lewis Baglietto QC, Partner of Hassans, a full-service law firm in Gibraltar with offices in Spain.
You are mostly experienced in litigation and shipping; in cases where these come hand-in-hand, what are the most common types of disputes?
The obvious and most common overlap we experience in Gibraltar is the arrest of ships and Admiralty claims in rem, often by creditors, suppliers of goods or unpaid crew. Gibraltar’s Admiralty Jurisdiction is very similar to that of England and Wales and is straightforward to understand. This and our geographical location make Gibraltar an attractive jurisdiction for the arrest of vessels.
How has Gibraltar advocated for Admiralty legislation change to benefit its own state over the past decade?
There has not been much need for change in this case, as Gibraltar has always kept apace with UK and EU legislation facilitating the enforcement of maritime claims and the taking of security in Gibraltar in aid of maritime proceedings or arbitration abroad.
Do you see the need for any reform in Maritime Law in order to further benefit Gibraltar’s trade and business prospects?
Not immediately, but we may need to review it in light of Brexit, and once the nature of the UK’s and Gibraltar’s relationship with the EU becomes clearer.
On the back of a Brexit, how do you think Gibraltar’s Maritime relationship with the EU will be impacted in the near-future?
As yet, without a clear exit plan, we cannot know because it is still too early to tell how Brexit will affect port activities, the practice of maritime law, or ship registration. It is likely that after Brexit Gibraltar registered vessels, like UK registered vessels, will no longer be EU Member State Registered. This will obviously become clearer once the nature and extent of the UK’s future relationship with the EU is worked out.
A leader in your field, you were appointed as Queen’s Counsel in Gibraltar in 2014; what rewards and challenges followed this appointment?
I regard such an appointment as a great honour and recognition of my commitment to the development of legal practice in Gibraltar over the past 30 years. The appointment has not radically changed the many professional challenges and opportunities I have enjoyed and continue to enjoy.
At the end of the day, it’s more a matter of personal and professional satisfaction for myself and my firm (and possibly good publicity too!).
Is there anything else you would like to add?
As I said before I feel very privileged to be able to practise maritime litigation in a place like Gibraltar, which has such a rich tradition in this area, partly because of its geography, but also because of our practical and effective legal system which is based on the English legal system and which is so much more efficient than that of neighbouring countries. This, together with the professionalism of local practitioners, the dedication of the Admiralty Marshal, his broker and the Supreme Court to maritime cases, have secured Gibraltar’s status as a prime Admiralty jurisdiction worldwide.
Brexit sparked an uproar of debates and arguments in relation to the issues of immigration in the UK; some want tighter borders and restrictions, whereas others argue that this will hinder the UK and its economy. We speak to Helena Sheizon who summarizes the complexities that are now faced in immigration law and if the points based system is a liable alternative. Helena is an immigration lawyer specialising in EU free movement rights. She is registered as Level 3 (OISC top level) immigration advisor.
What would you say are the biggest complexities UK law faces in terms of immigration and nationality today?
By far the biggest challenge for UK law at the moment is to preserve or, if we talk about immigration law, to re-introduce the rule of law. In immigration context, the rule of law is unfortunately a past affair, just as much as the concept of Human Rights.
The biggest complexity which is facing the British economy and the British society is in the clash between a blind nationalistic belief of the policy makers that expulsion of any foreign national is ultimately for the public good and the social and economic necessity for migrants in the UK. London above all places is reliant on foreign labour and to a major degree on EU labour. According to statistics of recent research commissioned and sponsored by the London Chamber of Commerce, over 35% of construction industry labour in London comes from the EU, over 30% of labour in distribution, hotels and restaurants and well over 20% in finance, transport and manufacturing industry.
We are facing one of the biggest expulsions of masses of population from the United Kingdom and from London in particular; it is worth remembering that the overwhelming majority of these people are economically active. Someone will have to take over their jobs or we shall soon see our local Costa coffee shops closed with signs “Sorry we are closed. Everyone has left.” And it won’t be just Costa. Every fourth business in London will be at risk.
Would the Points Based System offer an alternative to EU labour?
I suppose it will. The question is whether it will be an adequate alternative, and I am afraid the answer is no. I understand that many immigrants in the UK are here because the UK has been attractive to them, as an open and cosmopolitan society, the world’s hub spot and a melting pot for talent from all over the world. In the changing climate, the UK will lose its attractiveness. And we will end up with immigration by necessity, i.e. people seeking to be here because it was even worse somewhere else.
Points based system is very taxing, especially for workers in the Tier 2 category, because they are tied to one employer, with no guaranteed right of settlement and the system is clearly open to abuse by the employers. Those who have a choice may prefer to be somewhere else and many EU nationals would not agree to work under restrictive conditions of the points based system.
What are your opinions on the Points Based Tier System, and how would you see this changed?
Points based system is very restrictive. It is restricted in numbers; it is restricted to highly skilled migrants and those whose jobs are on the shortage occupation list, and is restricted in terms of prescribed salaries and duration of visas granted. There is potentially a window for a new, Tier 3 category, which would cover lower skilled jobs, such as construction workers, plant operatives, caring and leisure services. This immigration category does not exist yet, but it is generally expected that it will be brought to life as a result of Brexit.
What are the consequences of non-compliance with UK immigration rules, and why is expert advice crucial?
The rules were described by the judges as byzantine regarding their complexity, unfairness and irrationality. And that was when the judges still had to apply the rules in immigration appeal hearings. Now immigration appeals have been abolished, there is no control over decisions of the government officials and administrative powers and discretion are unfettered. A minute noncompliance with evidential requirements may lead to expulsion of the whole family of a Tier 2 or Tier 1 worker without a right to return for 12 months, or without the right to bring the business for a conclusion where Tier 1 entrepreneurs are concerned. With dismantling of the Human Rights Act, the fact that the decision has a disproportionately harsh effect on the individuals affected is not of any relevance. In country right of appeal is further curtailed with effect from 1st December 2016 and 28 days’ grace period for making alternative applications after one failed attempted is substituted with much harsher provisions in the immigration rules. These changes in Immigration law now mean applications must be made right first time around and professional help is absolutely essential.
Is there anything else you would like to add?
We encourage employers of migrant workers to become more proactive in helping their employees obtain permanent right of residence in the UK. Next month we will start a series of free webinars ‘Protecting Migrant Workers’ and we invite employers of both EU and non-EU national migrants to join us.
Earlier this month, The House of Lords EU Justice Sub-Committee, under the Chairmanship of Baroness Kennedy of The Shaws, continued its short inquiry into the consequences of Brexit for the rights of EU nationals in the UK, and for UK nationals in other EU Member States. The Committee heard evidence from barrister Anthony Speaight QC and leading academic Professor Catherine Barnard.
Nationals of any EU Member State are deemed citizens of the European Union and therefore enjoy the same treatment under EU law, irrespective of their nationality, anywhere within the EU. The loss of this fundamental status, as a consequence of leaving the EU, leaves many EU nationals in the UK and UK nationals in other Member States with their EU citizenship rights, such as residency rights, uncertain.
This month’s ‘Your Thoughts’ is dedicated to answering the never-ending questions circling the effects of Brexit. As the UK embarks on a decision that somewhat surprised the entire world, the Government has to consider several factors when moving the UK out of the EU; a major factor that remains prevalent, is immigration and the movement of EU members. The ever-important question, however, is how will those who currently live in the UK be affected. Some have already considered venturing outside the UK, whereas those who want to stay, fear they may not be welcome to do so.
To shed light on some of these issues, we reached out to several experts and professionals in their field, who have given particular insight into how the rights of EU citizens will be preserved and what Brexit could possibly imply for EU nationals currently residing in the UK.
Rustom Tata, Chairman of DMH Stallard:
The answer depends on many inter-related factors, but my view is that it will be a qualified ‘yes’, with a distinction being drawn between those settled here and newer arrivals.
Economic and labour market imperatives for the UK mean that there will continue to be the need for overseas workers, in a variety of skilled, semi-skilled, and lower skilled roles. Certainly, away from the glamour of city banking and finance, the “Cinderellas” of construction, hospitality and care have all loudly trumpeted their dependence on EU workers.
Unless the UK Government is, for instance, going to introduce a major overhaul to the apprentice schemes already in place, so as to ensure that there will be a pool of skilled, motivated individuals to fill the gaps which will no longer be filled by EU workers, there will be an economic imperative to allow entry to the UK.
In return for a somewhat limited access to the EU free market, we could well see the freedom of movement of people pared down, so as to only relate to those who are economically active in some way.
This could be narrowly defined as ‘workers’ – that is those with a job offer, and probably those who can show that they are actively looking for a job. It may be that people in the latter category would only have the right to remain in the UK for a finite period, or that they would need to hold skills or qualifications identified by the UK Government as in short supply.
What about those already here? One strong possibility is that EU nationals in the UK (and whether or not if they are in work) at a specified date, will be able to remain and compete for employment in the UK alongside UK nationals.
From the work we are doing with clients across a number of sectors, it is clear that HR teams are reviewing the composition of their organisation’s workforce, and trying to plan for the contingency of a reduced pool of labour.
However, there is already concern that EU nationals currently in the UK are considering options outside of the UK, given the uncertainty that they face. Some are relocating abroad or actively looking for their next role within another EU country. People facing such uncertainty and without other connection or reason to stay in the UK may well choose to leave.
Sophie Barrett-Brown, Head of the UK Practice at Laura Devine Solicitors:
Following the EU referendum, EEA nationals and their families remain uncertain about their future in the UK – posing real concerns for many UK employers.
Until the UK actually leaves the EU – at least 2 years from now – it remains bound to recognise free movement rights. But this is cold comfort to many of the 3 million EU nationals already in the UK and their employers, as they struggle to plan for the future.
Although the government seems likely to put in place arrangements for equivalent permission to be granted under UK law when EU law rights evaporate, it is unclear what this will look like. What type of permission to remain will be granted? Will this be for those who have already acquired permanent residence, those in the UK by the date of the referendum, the date the UK actually leaves the EU, or some intervening date? And what will the process be?
Those who have already acquired permanent residence, having lived and exercised Treaty rights in the UK for five years, are likely to be granted equivalent indefinite status. Those who have not yet acquired permanent residence but are exercising Treaty rights before the cut-off date are likely to be given either indefinite or temporary status. EU nationals not exercising a Treaty right before the possible cut-off date face the greatest uncertainty.
The vast majority of EU nationals in the UK are essentially undocumented – as they’ve never had any need to seek Home Office documentation. So, some form of application process to identify cases where replacement rights under UK law are to be conferred seems likely. With 3 million already in the UK, an en masse rush to apply stands to be a recipe for administrative chaos.
This rush has already begun, with many applying for registration certificates and permanent residence certificates so that they are already identified as EU nationals, with recognised rights of residence in the UK, when the time comes.
Remarkably, the process of applying for a document recognising Treaty rights (a right, not a privilege) is extraordinarily cumbersome and slow. The Home Office has sought to implement some recent improvements, however at the same time problems remain or increased hurdles have been raised. Applications usually take 6 months to be considered, require excessive documentation and are frequently incorrectly rejected, causing unnecessary complication and delay.
For companies, not only is there the uncertainty of planning for their current EU workforce, but the unknown landscape for future assignees and new hires from the EU post-Brexit.
The sooner clarity can be achieved, the better for all.
Henry Warwick, Barrister, Henderson Chambers:
The extent to which rights of EU citizens living in the UK will be preserved following Brexit is unknown. But it is becoming clear that the position will be closely linked to the fate of the one to two million British citizens who live elsewhere in the EU. Led by Patrick Green QC, I represent a group of clients who made the case for British citizens overseas in the much publicised ‘Article 50’ judicial review (R (Miller & anor) v. Secretary of State for Exiting the European Union). My clients are seeking to ensure their parallel concerns are considered.
November’s High Court judgment in this case addressed the constitutional position as to the notification process under Article 50 of the Lisbon Treaty. The basis of the decision reached was that Parliament had conferred rights upon citizens by enacting the European Communities Act 1972. The effect of giving notice is that many such rights, including those relied upon by non-British EU nationals in the UK and British expatriates, will be lost and cannot be replicated by UK legislation. This is why the Court ruled that there was no prerogative power to give notice, and why Parliamentary approval is essential.
The fundamental rights both groups enjoy derive from their status as EU Citizens; they include rights arising under the Treaties, rights implemented in national law pursuant to Directive EC 2004/38, and rights guaranteed by the Charter on Fundamental Rights. The effect of their removal will be profound: British expatriates, for example, rely not only upon their ability to live in another member state, but also to access public services including healthcare, to work and establish businesses and to equal treatment, which we take for granted.
Prior to the referendum, the government acknowledged these would not be acquired rights as a matter of international law. It has since engaged in bilateral discussions, as talks with the Commission are currently banned by order of its President, Jean-Claude Juncker, a measure we are also challenging under Article 263 TEU in the General Court in Luxembourg. It is clear so far that the rights of EU citizens living in the UK will be dependent upon rights being granted reciprocally to British citizens living in Europe. That in turn will turn upon the success of the Government in its negotiations. There is therefore a very real risk that many of the rights of EU citizens in the UK will not be preserved post-Brexit.
Michael Hatchwell, Officer and Director at Globalaw:
As it currently stands, it would be against the law to reduce or diminish the rights of EU citizens living in the UK. However, once the UK has officially left the EU and Brexit has been fully enacted, the laws may be changed to reflect this new political situation; EU citizens living in the UK will no longer fall under a special legal category, but could instead become grouped with all other or certain categories of other foreigners living in the UK.
Overall, it seems unlikely that the rights of EU citizens to be treated as UK citizens will be stripped in their entirety as result of Brexit.
As regards to property ownership (real estate and companies) there are no real restrictions on foreign ownership of UK assets, so there is no reason why EU citizens or entities will be worse off in this regard after Brexit. However, the continuation of other key rights associated with EU membership, such as the free movement of people, is more difficult to predict.
The issues and considerations relating to free movement of people, namely: immigration, visas, the right to travel, the right to work and more, were a major focus and at the forefront of the Brexit debate. Currently, we see that these topics are now open for public debate and renegotiation within the public sphere. What remains to be determined is the impact that these debates, driven by popular sentiment, will have on the laws of the UK. It is worth noting that the UK economy is dependent upon hundreds of thousands, if not millions, of workers from the EU who currently work in the country.
Groups such as the 3 Million Forum, a group of EU citizens living in Britain have announced that they will launch a formal campaign for a new law to protect their rights post-Brexit. Is there any reason why their rights are less important than a British citizen? After all they came here legally and openly as part of the UK joining the EU.
One way to look at this is through the lens of the recent public reaction to the High Court’s ruling that Parliament must vote on triggering Brexit. This ruling, which frankly was entirely predictable, has led to pro-Brexiters claiming this is contrary to the will of the people as the ruling may be used to delay Brexit. On the first day of the appeal, December 5th, Nigel Farage has announced that he will lead a 100,000-strong march to the Supreme Court in protest to any delays to the government’s plans to trigger Brexit.
The appeal decision will be important. I do not anticipate that the original decision will be changed. The referendum was a crude and simplistic way of seeking a vote on a matter of very great complexity and it is inevitable, especially when no one had considered the consequences of the Brexit camp winning, that a huge mess would ensue. Referenda appear democratic but absent a clear constitutional path as to consequences of any vote, the result is inevitably confusion and uncertainty.
There is a long way to go before there will be real clarity on such complex issues. In the meantime, the status quo prevails.
The Bar Council has warned that the UK economy and London’s position as the leading centre for dispute resolution will suffer if Brexit negotiations do not ensure that UK court judgments are enforceable in EU Member States, once Britain leaves the European Union.
In written evidence to the Commons Justice Select Committee, published today, the Bar Council said:
“In a globalised world, it is crucial that the judgments of one state are enforced by the courts of another.
“It is critical that UK citizens, businesses, institutions and the UK Government retain the right to have judgments which they have obtained in the UK courts efficiently enforced, and to have the jurisdiction of the UK courts recognised, throughout the EU.
“This is also essential in order to retain our position as the leading dispute resolution centre in the world, with the important economic benefits which this brings.
“These mechanisms are vital for the healthy functioning of the UK economy in general and the UK legal sector in particular.”
English law is the most commonly used law in international business and dispute resolution and is the main choice of law for commercial contracts, but the Bar Council has cited anecdotal evidence that some international parties may already be choosing not to use English jurisdiction clauses.
The Bar Council evidence said:
“Anecdotally, the Bar Council has heard of a number of cases where parties are being advised not to choose English jurisdiction clauses in their contracts because of the uncertainty surrounding the jurisdiction and judgments regime.
“Much international dispute resolution work comes to English lawyers because the parties to a dispute have chosen to have their dispute resolved in the English courts. If jurisdiction clauses designating the English courts are not effectively respected in the EU, this will make such clauses considerably less popular.”
Before UK and EU officials get down to the detailed work of unpicking laws and drafting the transitional measures to govern Brexit, they may first have to deal with 40 billion euros the UK should pay into EU coffers to serve out its time as a full EU member.
The money is expected to become a negotiating chip with UK officials under pressure to curtail payments to a club it will no longer be a member of.
UK premier Theresa May is planning to start formal exit talks by the end of March next year, triggering two years to negotiate divorce terms. Those talks will have to resolve questions over UK businesses’ continued access to the EU market and restrictions on the movement of EU citizens on British soil.
Curbing immigration and ensuring full market access are often presented as a trade-off, forming the main axis to the negotiations. More of one means less of the other. But this misses the point. A much more incendiary area will be the outstanding bill the UK has to pay.
MLex understands officials are working on a figure of potentially 40 billion euros covering the period to the end of 2019, when the country is expected to leave the union.
EU leaders have stressed that during negotiations, the UK will remain a full EU member, enjoying all the same rights and being subject to the same obligations as other states. This clearly means it must pay its bills.
But in reality, the UK government could put the budgetary contributions at the forefront of negotiations, in the hope of gaining leverage. At least, that’s what Brussels officials are expecting.
The EU will be keen to obtain the funds, but May will come under public and political pressure to scale back payments.
According to a “landscape” assessment from the EU’s Court of Auditors published in November 2014, the EU’s “debts” — comprising undelivered spending commitments, purchases and staff pensions — ran to 326 billion euros. The spending is not covered by the current seven-year budget.
The UK’s contribution to the total EU budget is 12.3%, which puts its share at 40 billion euros.
There are two clear types of payment at stake: one to settle its outstanding liabilities up to the end of EU membership, and another that may feature future payments after Brexit.
The latter could cover the costs of access to the EU’s single market or the UK’s continued participation in certain European programs for, say, research and development or regional support.
In reality, negotiations are likely to blur the distinctions between those two pots.
A central plank of the Leave campaign in the referendum was the claim that EU membership cost UK taxpayers 350 million pounds a week. Leaving the EU would mean UK ministers could themselves choose how to spend this money, the Leave camp argued.
To date, Theresa May and her ministers have conspicuously said nothing about whether the UK will continue to make payments to the budget.
Asked about budget payments, May’s spokeswoman said she would not give “a running commentary on all the minutiae” of the negotiations, which will cover “a whole range of issues and angles to our relationship.”
But given the Leave campaign’s spending promise during the referendum, the prospect of continued payments of any size into EU coffers after Brexit could be politically unpalatable for many pro-Leave lawmakers.
May’s spokeswoman said that a pre-condition is that “the decisions on how British taxpayers’ money is spent should be a decision for the UK.”
That may leave on the table a scheme like Norway’s. Oslo pays billions into social reform and climate schemes in eastern and southern Europe as an entry fee for access to the single market. Unlike normal EU spending, however, the schemes are directly approved and audited by Norwegian officials.
And if the UK is prepared to pay its 40 billion euro bill, or commit to continued payments into some EU programs, it could win some leverage in exit negotiations.
Spending under the EU’s seven-year budget is pushed to its upper limits, with the migration crisis and terrorism producing lengthy bills. The hard truth is: Brussels needs the money and the UK is one of the largest net contributors to the EU budget.
Written by Lewis Crofts and Matthew Holehouse at MLex, the regulatory newswire.
(Source: MLex)
Germany’s small businesses are the most optimistic about their own economy according to the inaugural Global Business Monitor report from international business funder, Bibby Financial Services (BFS).
Nearly three-quarters (73%) of German SMEs say their national economy is performing well in the global study that surveyed business owners in the US, Germany, UK, Poland, Hong Kong and Ireland.
More than two thirds (67%) of Irish SMEs are confident about the local economy. German and Irish SMEs are also most confident about the future with 57% of SMEs in both markets expecting sales to grow in the year ahead.
Conversely, less than one in five businesses in Hong Kong (15%) say they are confident about their local economy, with less than a quarter (24%) expecting sales to increase in the next 12 months.
Steve Box, International CEO of Bibby Financial Services said: “Germany is often seen as the industrial beating heart of Europe. Our research underlines the confidence of the small businesses in Europe’s largest economy as the EU looks to agree its shape post-Brexit.
“It is a different picture for the economy in Hong Kong where the majority of business owners are pessimistic about future sales and the local and global economies.”
The study reveals the sentiment of global SMEs in areas such as investment, confidence, challenges and opportunities, overseas trade and payment terms. In relation to international trade, findings show that small businesses in Hong Kong are three times as likely (69%) to export as those in the UK (22%) and seven times as likely as in the US (10%).
Steve added: “Due to its geographical location, Hong Kong is an important gateway to trading activities between China, the US and Europe. Its economy is highly export driven and this may explain why confidence is subdued during a time of economic change and significant currency fluctuation.”
Across the study, almost a quarter of businesses (24%) said that foreign exchange fluctuations are the biggest challenges they face in relation to international trade. For SMEs in Poland and Hong Kong, figures rose to 46% and 37% respectively.
Despite pockets of confidence in their local economies, the research reveals that nearly three-quarters (73%) of all SMEs have concerns about the global economy, with those in the US (83%) and Ireland (82%) the most concerned.
Steve concluded: “It’s clear that confidence in the global economy has suffered due to macro-economic and geo-political events in the last six months. The real question is for how long will confidence be affected?
“It is likely that the UK’s formal exit from the EU – commencing with the triggering of Article 50 by the end of March next year – will have further economic consequences that will be felt around the world.
“As the world shapes itself with a new US president and an EU without the UK, it is those small businesses that can adapt to changing domestic and international trading conditions that will be best placed to profit and grow in 2017.”
Other key findings of the Global Business Monitor report include:
Challenges
Investment
Payment terms
Manufacturing (39 days) and construction (40 days) businesses typically wait longest for payment when compared to other industry sectors.
(Source: Global Business Monitor)
Here to talk about his General Counsel role, his leadership in the sector, compliance, Brexit and ‘the Internet of Things’ is Jonathan Burton, Head of Legal at Bosch UK & Ireland. Lawyer Monthly hears from Jonathan on the challenges and complexities involved in heading up the legal team at Bosch, how the internet and advent of technology is changing the landscape of said challenges, and on the future goals and prospects of his legal career.
Can you tell LM briefly about the extent of your role, what it looks like day to day, and the kinds of exciting jobs you engage with?
Whilst I’m sure this could be said for most in-house positions, no one day is the same - which is why I enjoy it so much. Bosch is involved in so many different businesses and always looking to innovate and expand into new areas, so the role is constantly evolving. In terms of day to day, I have to circumvent the M25 most days, so I tend to leave pretty early to avoid the inevitable gridlock. A typical day starts with a meeting with the team to discuss priorities for that day and any shared learning points. The day is then divided between case work, meetings with management and communications with colleagues in Germany. Given the nature of Bosch’s business we are involved in very exciting projects from autonomous driving, to smart homes and Industry 4.0. Never a dull day in Bosch HQ!
Do you have a team around to help you in these matters? How do you manage this team?
I have a fantastically hard working and talented legal team in the UK. The vision for the legal function in the UK is to maintain “A friendly, accessible team which provides commercial and creative solutions through its unconventional and adaptable approach.” To me the “unconventional and adaptable” element of this role is in surprising our clients with a fresh approach to legal issues. The best example of this is seen in a recent training we organised – having a Star Wars theme and raiding my boys’ Lego collection!
What recent legislative developments have significantly affected the way you work in your role? Has Brexit been a potential for change at all?
We are currently planning for the implementation of the GDPR in 2018, which will impact the majority of Bosch’s businesses in the UK. As for Brexit, we are monitoring developments and keeping up to date with our customers and trade associations. It is still too early to say what is around the corner, but where we have historically relied on our membership of the European Union for certain protections, this may need to be established in the UK and might require additional support.
Are there any ongoing projects which you have had to recently oversee and provide particular legal leadership towards?
We recently acquired a business in Bristol (Kliklok International Limited) that manufactures packaging machinery for the food industry. Having come from a corporate background in private practice, the interesting aspect, from an in-house perspective, with these transactions is what we call the PMI (Post Merger Integration) process. At a law firm the deal tends to end when the bible has been completed. Being in-house provides the opportunity to meet a new team and assist in developing synergies with the wider organisation to achieve future success.
What would you say is the biggest challenge of being Bosch UK’s Director of Legal Services?
The biggest challenge is the ever-evolving nature of our business. Bosch is focused on exploring disruptive business models and constantly developing new products and solutions. This brings with it new challenges. The key however, is not to dwell on these, but to focus on the opportunities that the new business areas bring.
Despite certain challenges, what are the overall rewards, both personal and professional, of your role?
I get to work with incredibly talented, dedicated and knowledgeable people every day, from all over the business. It is an environment which drives constant innovation and as legal director I am one of the first to learn about the new products, services or concepts. Bosch is owned by a charitable trust, and the culture that this brings flows through the organisation, making it a really inspiring place to work.
You also serve as the Compliance officer for Bosch UK & Ireland; what kind of complex considerations do you have to make on a daily basis and how difficult is it to oversee compliance governance throughout the entirety of the company?
We introduced a ‘Compliance Dialogue’ last year, which saw us move away from lecture style presentations and put the emphasis on open communication within teams on compliance topics. Compliance now features on all agendas of the various board meetings, but also at general team meetings throughout the region. I try to use real life examples and case studies as much as possible, and get our employees to discuss potential compliance issues encountered in their daily business lives.
The Bosch Group has over 4,200 employees across 40 locations; what are the biggest difficulties in managing these employees, from a legal perspective?
Actually we have around 5,300 associates throughout the UK. The biggest challenge is getting around to see the different businesses, and being a visible and not just a virtual presence. We get the most out of our function when we build relationships with our employees and become that trusted business advisor. This works best by getting out there and fully understanding the various businesses. It’s not unusual for our lawyers to pop up at sales conferences or trade shows, and we regularly attend training on the products themselves.
How would you say the ‘Internet of Things’ is changing the priorities and considerations of in-house counsels around the world? In regards to this, what risk management steps would you define as paramount to the safe future running of the business?
The active presence of Bosch within the ‘Internet of Things’ is certainly having an impact on the legal team. We are working on projects involving industry 4.0, energy, mobility, smart homes, and smart cities. Each involves new business models and a greater emphasis on data protection, privacy, cyber security, software and intellectual property, than ever before. Whilst there is support available from the wider Bosch function, we are receiving more training in these fields and building closer working relationships with external law firms.
When you first jumped into this role, what were your career goals and professional ambitions? Have these changed since you began in 2012?
On joining Bosch my main objective was to understand the organisation as quickly as possible. Bosch has an enormous amount of acronyms to describe everything, including: business divisions, financial terms and HR matters – some of which are intuitive and others left me scratching my head. The first challenge was to master these! Overall, my ambition was to further the legal department’s progress on being a strategic business partner as well as maintaining our governance role. This hasn’t really changed.
I have contemplated moving towards a CEO role in the future and the advantage of my position in Bosch is that you gain such an oversight of all the various businesses with the opportunity to influence at that level.
