In Counsel – Autumn 2018

18 / 09 / 2018

Welcome to the Autumn edition of our In Counsel publication.

Although the Brexit-related political temperature cooled over the summer while we sweltered through the hottest summer on record in England, it is certain to rise again over the next few months. Julia Jackson of our Employment team, specialising in immigration issues, therefore looks at the impact of Brexit and a possible no deal on EU nationals living in the UK. We also outline other national and EU law developments affecting your business including:

  • Claire McConway, new partner in our corporate and financial services and funds team, analyses the UK rules governing dividends and other distributions and approaches of popular common law jurisdictions (many of them offshore) when considering where to incorporate holding vehicles;
  • Edward Craft and Camilla Wallace report on the draft legislation for the new “PSC in property” regime;
  • James Castro-Edwards and Blair Adams, have prepared a guide for HR teams on how companies should deal with data breaches under GDPR; and
  • Emily Matthews points out the importance of mental health at the workplace and the measures employers can engage to improve and promote positive mental health.

Rosalyn Breedy emphasises the benefits of adherence by the UK asset management industry to the key findings of the FCA Asset Management Market Study; and Jonathan Cornthwaite specialising in competition law, provides an analysis of the recent European Commission decision in the Google Android case.

Clive Weber and Katie Whitford look at the recent successful appeal by British Airways against the BA pension scheme Trustees’ award of pensions increases, and Justin McGilloway reports on the implications for company directors and the Pensions Regulator of the government’s response to its consultation on measures designed to improve corporate governance within companies which are in or approaching insolvency. Finally, Edward Craft and Harriet Forster comment on the Law Society’s consultation aiming to identify and address legal uncertainties concerning electronically executed documents.

Wedlake Bell news

We completed our merger with Stitt & Co on the 30th July and the combined firm has 66 partners. Four partners from Stitt & Co alongside eight members of staff joined Wedlake Bell and the merger will reinforce the firm’s already well-established practices particularly in commercial litigation, commercial and residential  property as well as private client. Click here to read more.

We are also very pleased to welcome Claire McConway who joined as a new corporate and funds partner in August. After a nine year career in UK and U.S. corporate and funds law practice in London, she spent several years practising offshore law (principally BVI, Bermuda and Cayman) and has recently returned to practising English law. She originally qualified as a solicitor in England and Wales in 2000 on completion of her training at Herbert Smith’s London office. She is also admitted to practise in New York, California, the Republic of Ireland, Bermuda and the BVI.

Janice Wall, Head of Corporate

Brexit

Brexit, EU nationals and no deal

The first applications from EU nationals wanting to stay in the UK after Brexit were submitted to the Home Office on 28th August.  The date marks the start of the private beta-testing stage of the new settlement scheme for EU nationals, initially open only to university students in Liverpool and NHS workers in the North-West of England. Read full article

Competition

One fine day: The European Commission’s decision in the Google Android case

The European Commission seems to be falling into the habit of imposing record-breaking fines on Google before packing up for its summer holidays. It happened last year when, at the end of June, the EC announced an eye-watering fine of €2.4b in the Google Shopping case, more than twice as large as the biggest anti-trust fine that the EC had previously imposed. And it has now happened again, for in the latter part of July of this year the EC imposed upon Google an even more massive fine of €4.34b for having again breached EU competition law, this time in connection with illegal practices regarding Android mobile devices.  In this article we focus on the legal aspects of the EC’s decision in Google Android in order to see what can profitably be learned from it. Read full article

Corporate

Capital maintenance for holding companies: A comparative look at dividends and other distributions

When it comes to deciding where to incorporate a company, it is not uncommon for cross border holding structures to have multiple options on the table.  Although the available choices for operating companies are often narrowed due to the need for compliance with local regulatory regimes or tax treatment, there is often a wider choice available higher up in a holding structure.  Typical factors include tax structuring and a jurisdiction’s market reputation in the relevant sector.  When setting up a new holding vehicle, the ability to move funds and assets between group companies is an important factor that is usually overlooked.  Read full article

PSC in property is one step closer

As it committed to do, BEIS has issued draft legislation for a new regime for “PSC in property”, in the form of the Overseas Entities Bill. This bill has only been published in draft and has not been read in Parliament. Indeed, it is not provided for in the current session. The regime is expected to be operational by 2021. Read full article

The FRC in the balance

Sir John Kingman, chairman of Legal and General plc has been charged by the government with carrying out a root-and-branch review of The Financial Reporting Council, that rather odd beast in the corporate reporting and governance landscape. Read full article

Employment

Reporting data breaches – A guide for HR teams

Having spent weeks or even months making your HR processes, systems and documents GDPR-compliant, you will realise that there is no let-up and that the focus of your efforts will now extend to dealing with data breaches. Read full article

Mental health in the workplace

The economic cost of mental illness in the workplace is now well documented. Mental ill health at work is estimated to cost UK employers £26 billion per year, which on average equates to approximately £1,035 per employee. Read full article

Relief for employers seeking to obtain restricted certificates of sponsorship 

In the last In Counsel, we reported on the problems being encountered by employers trying to obtain restricted certificates of sponsorship for new recruits from overseas. We are pleased to see that, as predicted, the removal in July of roles for doctors and nurses from the allocation of restricted certificates has had an immediate and clear effect.  Read full article

Financial services

Isn’t it time the UK asset management industry embraced the FCA asset management market study?

The FCA Asset Management Market Study, published June 2017, acknowledged the vital role the UK asset management industry plays in managing the savings and pensions of millions of people, allocating capital, performing corporate governance and contributing positively to the UK economy. Read full article

Pensions & Employee Benefits

British Airways: Court of Appeal defines the proper purpose of an occupational pension scheme and narrows the role of pension scheme trustees 

British Airways has successfully appealed against the BA pension scheme Trustees’ award of pensions increases. The Court of Appeal reversed the High Court decision in favour of the Trustees by a two to one majority. Read full article

£800m buyout of new BHS pension scheme

Pensions Insurance Corporation has announced an £800m buyout of the new BHS pension scheme, BHS2, on 12 August. BHS2 members were approximately 9,000 BHS pension scheme members who did not take a cash lump sum or transfer to the PPF, opting to transfer to the new sponsorless scheme under the terms offered by the predecessor BHS schemes.  Read full article

Insolvency and directors duties: change is coming…. 

On 26 August 2018 the Department for Business, Energy and Industrial Strategy published the government’s response to the consultation on measures designed to improve corporate governance within companies which are in or approaching insolvency. Read full article

Property & Construction

Electronic signatures

Commercial parties are becoming more familiar with electronic signatures. In the summer of 2016, the Law Society produced a practice note summarising the current legal position and supporting the use of electronic signatures. However, many concerns continue to subsist in relation to this, particularly in the real estate industry. For this reason the Law Commission has turned its mind to the issue.  Read full article

Click here to read the PDF version of In Counsel.