In Counsel Update - Winter 2017
Welcome to the Winter 2017 edition of our In Counsel publication.
In this update we will outline the most recent legal developments affecting your business, in particular, the Government’s Green Paper on Corporate Governance Reform, the implied duty of good faith in commercial contracts and its impact on deferred consideration clauses in corporate sale and purchase agreements, and a recent High Court case on the question of whether, under the Duomatic principle, a company’s articles of association could effectively be amended by the holders of 75% of its share capital. We also set out, among others, the new immigration rules requiring employers who sponsor overseas workers in the UK with a Tier 2 status to pay the Immigration Skills Charge starting from April of this year, analyse the recent rulings of British and EU courts on Nestlé’s application to register the shape of its well-known four-fingered KIT-KAT bar as a trade mark, and provide an insight into the latest chapter of the BHS saga.
If you would like to know more about any of the topics covered in this update please get in touch.
Wedlake Bell News
We are pleased to announce that Kim Lalli was elected as the firm's new Senior Partner and began her four year term on 1st January 2017. Kim’s appointment comes shortly after Managing Partner, Martin Arnold, was re-elected for a second term to lead the firm. Martin has been in the position since 2012 and his new term is effective from April 2017.
Kim Lalli is Head of the India Group and was previously Head of the Real Estate Group. She has been at Wedlake Bell for almost 14 years and is the firm’s first female Senior Partner. Wedlake Bell is committed to promoting the organic growth of talent on merit, and over a third of the firm’s partnership are female, with a total of 96 female fee-earners. In addition, Wedlake Bell is ninth (out of the UK 200) in terms of the percentage of Equity Partners who are female.
We further welcome Julia Jackson as our new Immigration Partner strengthening our Private Wealth, Corporate and Employment practices. Julia joins the firm having spent the past decade heading Julia Jackson Solicitors, a specialist corporate, business and high net worth immigration practice.
Julia specialises in corporate and business related immigration law and has extensive experience advising clients on immigration matters. She predominantly acts for employers, senior business executives and high net worth individuals coming into the UK. Her wide-ranging client base includes oil and gas, investment banking, architecture and IT businesses amongst other sectors.
Janice Wall, Head of Corporate
Marlies Braun, Editor
- The future direction of corporate governance – “Something must be done” - We live in a time of transition. Old assumptions and alliances are being challenged. Calm, reasoned, rational debate is lost in the cacophony. British politicians state the case that "action is needed" to improve the legitimacy of business, to repair trust between business and society and to improve the state of corporate governance. The parliamentary Business, Innovations and Skills Select Committee and the Department for Business, Energy & Industrial Strategy have been stepping on the toes of each other to demonstrate leadership. The latest initiative is Greg Clarke’s (the new Secretary of State for Business, Energy & Industrial Strategy) and the Prime Minister’s recent Green Paper on Corporate Governance Reform. Read full article
- The implied duty of good faith in commercial contracts and its impact on deferred consideration clauses in corporate sale and purchase agreements - Jurisdictions around the world (including in the United States, France, Germany and Holland) generally recognise, to some extent, the principle that contracting parties owe each other a duty of good faith in the performance of their contractual obligations. This piece will look at the differing approaches taken in several jurisdictions and how English law has developed in this regard. Read full article
- Yet another Shareholder Spring ahead – impact of the Shareholder Rights Directive on shareholders in listed EU companies - The legislative process to amend the Shareholder Rights Directive (2007/36/EC) is finally drawing to a close: it has been in progress formally and informally for almost five years. Read full article
- FCA review of crowdfunding rules - The Financial Conduct Authority has published the interim feedback to the call for input to the post-implementation review of the FCA's crowdfunding rules (FS16/13) summarising the feedback received from the market. Read full article
- Application of the Duomatic principle - In the recent case of Randhawa & Ors v Turpin & Anor, the High Court analysed the question whether, under the Duomatic principle, a company’s articles of association could effectively be amended by the holders of 75% of its share capital. Read full article
- Thought for the year: From a binary to a non-binary world – social progress, but legal challenge? - Two very important issues that will continue to play out during 2017 and beyond are the "workers" rights debate, and how to make transgender people feel welcome. Read full article
- Immigration Roundup - Starting from April of this year, employers who sponsor overseas workers in the UK with a Tier 2 status will be required to pay the Immigration Skills Charge. The charge is due to be set at £1000 per overseas worker per year or at the reduced rate of £364 per annum per worker for small or charitable organisations. Read full article
IP & Commercial
Fingers crossed: Is the shape of the KIT-KAT bar registrable as a trade mark?- It has long been possible to seek the registration of (inter alia) “the shape of goods or of their packaging” as a trade mark both in the UK and in the rest of the European Union. Manufacturers have made good use of this entitlement over the past two decades to secure the registration of a wide range of three-dimensional marks. Yet the confectionery industry has struggled to take advantage of this entitlement. Thus, in the last few years, Mars, Lindt and Storck have all failed in their respective attempts to register the shape of their confectionery as trade marks. Read full article
Pensions & Employee Benefits
RPI/CPI: RPI, or new chapter? - Relief for members and disappointment for employers: on 2 November 2016 the Court of Appeal upheld the High Court decision in Buckinghamshire v Barnardo's, thus precluding the Barnardo's scheme trustees from any switch from RPI to CPI for pension increases. Read full article
BHS: Where are we now? - In the Summer and Autumn 2016 In Counsel updates and the May 2016 Pensions Bulletin, we examined the well-publicised BHS pensions debacle. Since then, a considerable amount of time, effort and money has been spent in trying to reach a solution to the problems left behind after BHS's collapse, not least the underfunded pensions. As the curtain came down on 2016, were we any closer to an acceptable solution for all stakeholders? Read full article
Protecting a bankrupt's pension: Horton v Henry, Court of Appeal 7/10/2016 - Good news for debtors but disappointing for creditors: the Court of Appeal has decided, in its recent Horton v Henry decision, that a bankrupt individual's pension rights cannot be exercised by his trustee in bankruptcy. Read full article